Deficits Quotes
This is the kind of advice that Presidents have given the Congress for years. What makes this quotation noteworthy is the person who made the statement, President George W. Bush. It was made in the 7th year of his Presidency which had in those 7 years, at his urging, gone from a balanced budget and a national surplus projected, to the largest deficit of any nation in history and a projected deficit that even dwarfed that. So the irony of the quotation was that the politician who produced the largest economic burden on future generations was lecturing other politicians on the evils of doing exactly what he himself had been doing. Bush, if nothing else, was one of the most audacious politicians in this respect, though his most severe detractors claim that he did not have the intellectual perspective to even understand the hypocrisy of his quotation,
An unusual feature of the American governmental budgeting process is that Congress has passed a law limiting the amount of debt that the United States can maintain. When there is deficit financing, the law limiting the debt has to be changed periodically as the nation approaches the debt limit. Partisan politicians often take advantage of the fact that the debt limit must be passed and hold the passage hostage to obtaining something they want. The reality is that when Congress passed the previous budgets, they determined what the debt would have to be later. So they have already voted to exceed the budget ceiling. But the requirement of doing it in a second forum allows more pressure to be placed on the administration and the other party’s Congress members. While this process is ongoing, many people in the world are worried and often terrorized by the prospect of the debt ceiling not being passed, in which case the United States would have to default on its obligations—not pay interest, contractors, retirements, salaries, etc. Hence the admonition that the debt ceiling should never be a part of the budget negotiating process by most responsible statesmen and women. But the mist partisan of the politicians want to play politics with the debt ceiling precisely because the stakes are so high and they can get both headlines and leverage.
She was very extravagant in her living style at a time when the country was in deep financial straights. Resentment of this was one of the causes of the French Revolution.
This remarkable quotation illustrated the historical hatred aroused by the concept of government debt. Bryan, a religious man, states that debt is worse than murder. But a little over 100 years later, George W. Bush, also a very religious man, incurs a debt larger than all Presidents before him combined. Yet he thought it virtuous and best for the country. Both men were fundamentalist Christians.
Kennedy, with great Republican support proposed a reduction of the top income tax rate from 91% to 65%, reduction of the bottom rate from 20% to 14%, and a reduction in the corporate tax rate from 52% to 47%. That put the tax rates at the appropriate level. Economic growth was reasonable until President Reagan’s military spending cold war strategy produced huge deficits, Clinton raised the tax rates slightly and had the best economic growth ever, and had a balanced budget. George W. Bush lowered taxes had much slower growth and even larger deficits. However, by 2013 all hints of bipartisanship were gone. The Republicans claimed that the then tax rates were much too high—the highest income tax was half the rate that most agreed in 1962 was the right rate. And the corporate tax was 35 %, far lower than the Kennedy rate of 47% and incredibly lower when we consider that with deductions that were then in force the average corporate tax was only 12% the lowest since the Great Depression. Meanwhile the 2008 Bush Economic Meltdown and the Great Recession it produced the highest deficits in history with the lowest taxes in modern times and much of the polarized population demanding further tax cuts and an equal number demanding increased tax revenue.
Passionately commenting on the prospect of a Balanced Budget Amendment eliminating the deficit:
The Clinton budget was a very unusual one. He and Treasury Sectary Robert Rubin determined that the large deficit built up in the previous administrations and the high interest rate were competing with the private sector for investment capital. Therefore the budget raised taxes and took other steps to reduce the largest deficit then in American History. Virtually all of the Republicans saw disaster for the economy with this budget and even some of the fiscal conservatives from Clinton’s own party were opposed. The budget passed by a single vote in the House, and that started the largest economic growth period in American History. The economy became so strong that Clinton was able to produce a balanced budget, eliminate the Reagan deficit and produce more new jobs than any administration in American history. The prediction that the budget would cause the country to fail was, not only wrong, but the budget caused the nation to succeed, beyond what any thought possible. See {626772} for one of the warnings from his own party.
