Deficit Outlook and Fiscal Irresponsibility

Voting publics have short memories.  This is why politicians can create "histories" the way they want and scarcely anyone will notice how they have fudged.  Just now, this year, we will hear many stories about what has gone wrong with our country and in particular, at least as the Republicans tell it, how the current leadership has been profligate in spending.  I discovered a statement by Peter Peterson, a "life-long Republican," on the problem he saw in our country in 2004, and the prescience of his critique of his own party eight years ago.  It bears reading again, to grasp what the situation in this country looked like then, and how misleading could be the political rhetoric we will be subjected to for the next several months.

Deficits and dysfunction [Peter Peterson] Among the bedrock principles that the Republican Party has stood for since its origins in the 1850's is the principle of fiscal stewardship -- the idea that government should invest in posterity and safeguard future generations from unsustainable liabilities. ... Over the last quarter century, however, the Grand Old Party has abandoned these original convictions. Without ever renouncing stewardship itself -- indeed, while talking incessantly about legacies, endowments, family values and leaving ''no child behind'' -- the G.O.P. leadership has by degrees come to embrace the very different notion that deficit spending is a sort of fiscal wonder drug.  ... Since 2001, the fiscal strategizing of the party has ascended to a new level of fiscal irresponsibility. For the first time ever, a Republican leadership in complete control of our national government is advocating a huge and virtually endless policy of debt creation. The numbers are simply breathtaking. When President George W. Bush entered office, the 10-year budget balance was officially projected to be a surplus of $5.6 trillion -- a vast boon to future generations that Republican leaders ''firmly promised'' would be committed to their benefit by, for example, prefinancing the future cost of Social Security. Those promises were quickly forgotten. A large tax cut and continued spending growth, combined with a recession, the shock of 9/11 and the bursting of the stock-market bubble, pulled that surplus down to a mere $1 trillion by the end of 2002. Unfazed by this turnaround, the Bush administration proposed a second tax-cut package in 2003 in the face of huge new fiscal demands, including a war in Iraq and an urgent ''homeland security'' agenda. By midyear, prudent forecasters pegged the 10-year fiscal projection at a deficit of well over $4 trillion. So there you have it: in just two years there was a $10 trillion swing in the deficit outlook.