Fiscal Conservatism is Dead

The Republicans, I have been told, are all about fiscal responsibility and small government.  Um, OK.  Reagan ran up some of the largest deficits in our nations history at the time and George W. Bush took a surplus from Clinton, issues a huge 10-year tax cut, started an unnecessary war in Iraq, and started the financial bailout for rich wall street executives (TARP) prior to leaving office.  Faced with an economy in crisis, classic economics would dictate that increased federal spending is the best way to address that.  Hence the Obama stimulus package and his uptick on the chart below.

Today, government records indicate that the Bush tax cuts back in 2001 and 2003 will account for the single largest portion of our federal deficit over the next 10 years if it is allowed to continue.  More than both wars.  More than the combined Bush/Obama stimulus packages.  More than the economic downturn.

They talk about the expiration of these tax cuts as an Obama tax increase.  No.  They are a Bush tax increase.  It was very shrewd to put a 10 and 8 year sunset on those.  Bush would be out of office and the next president would have to deal with it.  If the President were Republican, (s)he would be pushing to continue them.  If the President were Democrat, then they could claim he was raising taxes.  This is a Bush law, not Obama's.  Nothing has to pass Congress or be signed into law for the Bush tax cuts to expire.

Now, the Republicans are pulling out the fiscal conservative card and screaming about how bad the deficit is.  Do you think you would still have a job if the stimulus wasn't passed?  Do you think we would be in a hellish economic hole right now?  We got a mix of what both parties wanted.  The Dems got a stimulus package that, at best, as pushed us into a flat and jobless recovery teetering on a possible double dip.  The Republicans didn't want a stimulus and we have a flat recovery as a result.  Ironically, there were several Senators that, while on the Senate floor decried the stimulus, on the campaign trail, they were bragging about how much of that stimulus was coming to their state.  The Republicans didn't want a stimulus despite them starting the whole deal under Bush with TARP and now want to continue the tax cuts which are the single largest contributor to our debt over the next 10 years.

The Republicans began a strategy of "NO!" the second Obama became president.  No matter what he planned to do, they would oppose it and vigorously.  They are so good at invoking fear that they are on the verge of a comeback in Congress.  I don't know, maybe mixed control will lead to something good happening.