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An Update to That Deficit Chart
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Last week I mentioned the Center for Budget and Policy Priorities Chart that analyzed the sources of the federal budget deficit. For old time's sake, a thumbnail of that chart is at right. The original explanation and source notes are on the CBPP's site. In brief: the parts in shades of blue are stimulus-related outlays and depressed revenues for economic slowdown. The big dark-golden colored central swath is the revenue forgone by extending the Bush-era tax cuts.*The CBPP has now applied its analysis not to the annual deficit but to the accumulated public debt -- the growth of which, of course, has been the source of so much political rhetoric and anxiety over the past year. The color coding is basically the same; the fine print and analysis are here; and the upshot is, as Chad Stone of the CBPP puts it,
"simply letting the Bush tax cuts expire on schedule (or paying for any portions that policymakers decide to extend) would stabilize the debt-to-GDP ratio for the next decade. While we'd have to do much more to keep the debt stable over the longer run, that would be a huge accomplishment."
It's also interesting, on an eyeball-estimate basis, that the tax cuts add three to four times as much to the total public debt as do the wars in Iraq and Afghanistan combined.
* As many readers have pointed out, although these cuts were enacted at the start of the George W. Bush Administration and supposed to expire last year, they need to be called "Bush-era cuts" rather than strictly "Bush tax cuts" since they were of course extended under President Obama. Yes, I know all the counter-arguments about exactly why and in what form they were extended -- the Obama Administration did so willingly for lower and middle income brackets, and under threat of Republican filibuster for the highest brackets.
It's fine with me to call them "Bush era" or even "Bush-Obama" cuts, because the real point of these charts is not partisan blame about how we got here. It is clarity about the choices ahead. The charts are very useful toward that end.
