About That Scary Deficit

If you're old enough to remember Count Floyd and SCTV Monster Chiller Horror Theatre, you may also remember this 1985 commercial.  It was commissioned by an international chemical company called W.R. Grace.

Jesus, Mary and Arthur Laffer, 2017 sure looks scary, which should come as no surprise since this bit of 60 second cinema was directed by Ridley Scott and cost about $300,000 in 1987 dollars to produce.

Fun Fact: It was initially rejected for broadcasting by all three networks back when such a thing was possible.  The networks rejected it on the basis of being too controversial and too one-sided, so W.R. Grace turned around and bought time on 150 independent stations.  

Then-NBC Vice President Rick Gitter was quoted as rejecting the commercial because "It's so well done. It expresses a view that budget cuts are a moral imperative" and didn’t even entertain the notion that, just maybe, raising taxes is also a valid option to pay down the deficits.  The only viable option that is ever on the table with Republicans are massive budget cuts.

Keep that top-of-mind: The only thing Conservative elites care about is cutting taxes for the rich. At all times and under all circumstances, there is no problem so great that they claim can’t be solved with a big enough tax cut.  Wars may come and go.  And as for the traditional battle cry of “Guns, God, Gays” those were all merely means to the end of getting enough Republicans elected so they could have more tax cuts.  

Even during times of budget deficits, you gotta cut taxes to stimulate the yadda yadda and you know the drill.  Utter bullshit.  That’s it.  Class dismissed.   

However, under Bill Clinton, Republicans had the opposite problem.  One they’d never anticipated.  What to do when, under a Democratic president,  the United States starts running budget surpluses and now has enough money on-hand to fund those social programs that Democrats had always wanted to improve, and Republicans were always demanding to be slashed because, hey, there’s a budget deficit!

But let’s not get ahead of ourselves.  Let us go back to one of the primary reasons George H.W. Bush lost in 1988.

If Bush the Elder is known for one phrase above all others, it's either his stand on “prudence” -- 

- or  "No.  New.  Taxes."  

That was his keynote address at the Republican National Convention in 1988 where he accepted his party’s nomination.  And in November of that year, he won the election.  

But he and his boss Ronald Reagan had spent the last eight years giving massive tax cuts to the wealthy, lowering the top marginal tax rate from 73% to 28%, which was the lowest the rate had been since 1925.  They also massively increased military spending.  And by Bush’s second year in office people were starting to freak out about the size of the federal deficit.  And so, in 1990, Bush the Elder broke his promise, and the opposition that fired up inside the Republican party plus an insurgent 3rd party run by H. Ross Perot pretty much doomed his presidency.

From NPR, December 14, 2018:

6 Little Words Helped Make George H.W. Bush (A 1-Term) President 

…less than two years after making the no-tax pledge, Bush found himself in circumstances in which he no longer felt he could keep it. Locked in budget negotiations with the majority Democrats in the House and Senate, Bush felt he had to allow higher rates on some existing taxes or the Gramm-Rudman deficit-reduction bill would shut down important services of the government.

So he signed off on a compromise involving revenues as well as spending restraints. Democrats exulted at having forced him to renege. Conservatives seethed. A young Newt Gingrich, elevated to the No. 2 spot in the House Republican leadership the previous year, made no secret of his displeasure. He insisted any option was preferable to any new revenue.

That position helped inspire a major Republican challenger to Bush's renomination in 1992. He was Patrick Buchanan, a former communications director for Reagan and a familiar commentator on TV. He announced his campaign for president in December 1991, saying he was running "because, we Republicans, can no longer say it is all the liberals' fault. It was not some liberal Democrat who said, 'Read my lips: no new taxes,' then broke his word to cut a seedy backroom budget deal with the big spenders on Capitol Hill."[

This was one of Bill Clinton’s  1992 campaign ads.  Notice that the objection isn’t about taxes per se, but about Republican unfairness and hypocrisy.  What costs more?  Beer and gas.  Who gets tax cuts?  Millionaires.

So, for most of the Reagan/George H. W. Bush Era the attitude was who gives a shit about deficits? We won! Reaganomics rule! Tax cuts rool! It's morning in Murrica!  And if the deficit needs to be cut, just slash a bunch of programs for those mooching poor and everything will balance out.

Then Bill Clinton was elected, and overnight, the Republican talking points about the deficit changed entirely.   Holy Mother of God! In the middle of the night while no one was looking a horde of mooching welfare queens snuck in here and nearly destroyed Murrica with deficits! 

Everyone knows deficits are worse than Hitler! We need to cut everything -- welfare, Medicaid, Social Security, school lunches, everything! -- in the next 60 seconds or we're all dooooomed!

Alan Greenspan let Clinton know before his inauguration, that  the situation was even worse than anyone outside Republican inner circles had let on.

From Bob Woodward’s book "Behind the Boom":

... On the five-hour trip back to Washington, Greenspan tried to assess what he had observed. Clinton was what Greenspan termed an "intellectual pragmatist." The term also applied to Greenspan himself. Clinton's campaign promises included tax increases on the wealthy, a violation of Republican orthodoxy. But increasing taxes reduced the federal deficit -- and those deficits, Greenspan thought, were such a threat to the future of the economy that it might just be worth it to support Clinton's proposal.

One of the paradoxes, Greenspan realized, was that by running up the federal budget deficits, Reagan had effectively borrowed from the period that was now going to be the Clinton era. Clinton would have to pay it back by paying down the deficit in some way. The irony was that Clinton probably wouldn't have been elected if Reagan hadn't created the deficits. ...  

Clinton was told by men like Greenspan that the markets would collapse and the world would be plunged into a who-knows-what kind of economic apocalypse unless he immediately put all his Liberal promises and programs on hold and focused almost exclusively on cutting the deficit.  

Which he did.  

Plans for improvements to health care, Social Security, education, and poverty programs were either shelved or greatly reduced.  You will remember that the phrase “Pay-Go” entered the political lexicon:  every budget item had to be accounted for with a matching revenue source, and any new spending would have to be offset with matching cuts to other spending.

Clinton reluctantly went along with all of it, but he also insisted on some revenue increases as well.  After all, if massive reckless tax cuts got us into this mess, surely a few sensible tax increases could help get us out of it.

And true to form, Republicans categorically rejected all of it.   According to them, any tax increase would completely destroy the economy, and America would be reduced to nothing but a smoking hole in the ground. Why does Bill Clinton hate America? 

Clinton also proposed a modest increase in the minimum wage, which – surprise, surprise – Republicans also categorically rejected.   According to them, any increase to the minimum wage would completely destroy the economy, and America would be reduced to nothing but a smoking hole in the ground. Why does Bill Clinton hate America? 

The Tax Reform Act of 1993 aimed to cut the federal deficit by increasing taxes and reducing spending. It was signed into law by President Bill Clinton in 1993. Not a single Republican in the evenly divided Senate voted for it and it passed 51 to 50 with Vice President Al Gore casting the tie-breaking vote.  

The Act raised the top federal income tax rate to 39.6%, as well as many other taxes including corporate taxes, fuel taxes, and more. And by 1998, it allowed Clinton's administration to achieve – say it with me now – the first balanced budget in three decades.  And  by the time Clinton left office, the United States was running a steadily growing, multi-billion-dollar budget surplus for the first time in American history.  

From a Clinton White House Press Release, September 27, 2000:

Today, at the White House, President Clinton announced figures released by the Office of Management and Budget (OMB), showing that this year's budget surplus will be at least $230 billion…

THE LARGEST UNIFIED SURPLUS EVER. 

The largest unified surplus as a share of the economy since 1948;

The 3rd consecutive year with a surplus for the first time in over 50 years;

The 8th consecutive year of fiscal improvement for the first time in American history; and

The first surplus excluding Social Security and Medicare, making it the only on-budget surplus since Medicare was established in 1965.

From the same press release  

THE LARGEST DEBT REDUCTION EVER. 

As a result of the budget surplus:

The President's plan to eliminate the debt by 2012 remains on track;

The 12 cents of every federal dollar we currently spend on interest payments would be eliminated;

The U.S. is on track to pay down more than $360 billion in debt over three years, the largest 3-year debt pay-down in our history. Under the 12 years of Presidents Reagan and Bush, the debt held by the public quadrupled. 

Great!  Now Ridley Scott can get on with making Black Rain and Thelma & Louise and Republicans can join hands with Democrats and celebrate the Clinton presidency as one of the most peaceful,  successful, fiscally responsible in living memory, and go on to elect Clinton's Vice President, Al Gore, to continue Clinton's amazing legacy.

Funny story.  True story.  The more Clinton succeeded delivering on the things Republicans had always said they cared about, the more they fucking hated him.  Called him everything but a Child of God.  Went after his wife.  Impeached him over some bullshit.  For much longer take on this, see my post "Like a Virgin" from 2009.

Meanwhile, from The Brookings Institute, December 1, 2000

A Surplus, If We Can Keep It: How the Federal Budget Surplus Happened

“It’s the economy, stupid.” The battle cry of Bill Clinton’s 1992 presidential campaign has been recycled to explain how a $290 billion budget deficit has been transformed into a $100 billion surplus that is expected to quadruple in the decade ahead. 

Liquidating the deficit ranks as one of the supreme budgetary accomplishments in American history. 

If the 1989 tax structure were still in place, there would be no surplus to discuss. 

So, pretty great right?  All those vital programs that Democrats were forced to postpone or put on starvation diets so they could pay down the Reagan/Bush deficits could now start to see some real money, right?

Well, that was one possible future for our country.

And then came the presidential campaign of 2000.  From The New York Times, June 13, 2000:

THE 2000 CAMPAIGN: THE BUDGET ISSUE; Bush and Gore Revise Plans To Match a Growing Surplus

By Richard W. Stevenson June 13, 2000

Projections of the federal budget surplus are likely to be revised upward by as much as $1 trillion in coming weeks, leading Vice President Al Gore and Gov. George W. Bush to prepare differing claims to the windfall.

For Mr. Gore, more money means new initiatives to encourage savings and improve education, health care and environmental protection, as well as to speed his plan to reduce the national debt, his aides said.

For Mr. Bush, it is a chance to assert that his plans for a big tax cut, the creation of private investment accounts within Social Security and a national missile defense program are not only affordable but would also leave plenty of money for additional debt reduction, his aides said...

Yes indeedy,  Dubya did have very different ideas about what to do with that surplus.  Note the first 60 seconds of this local news clip:

– and on December 12, 2000, thanks to a 5-4 vote by the Supreme Court’s Conservative majority:

Just like that, the budget surplus that the Democrats  had worked so hard to create, would be handed over to a dry-drunk halfwit whose attitude was Holy Mother of God, where did all of these terrible budget surpluses come from?!? Jesus, we need to get rid of them immediately. Surpluses are worse than Hitler!  Can you believe those craxy Libtards are actually worried about deficits? Wheeee! Who gives a shit about deficits? We won!

And for the record, here are a few other gifts that landed in Bush’s lap thanks to eight years of hard work by the Clinton/Gore administration:  a 3.9% unemployment rate, a robust job-growth rate and the "problem" of wage inflation caused by too few workers available to fill all the available jobs.

And you know what comes next, right?  

Read. My. Lips.  Giant. Tax. Cuts.

Credible economists like Future Nobel-prize winner Paul Krugman warned the Bush administration that their policies would plunge the country right back into deficit.  But did they listen?

No they did not.

The Shrill One in The New York Times, February 4, 2001:

Reckonings; Guns And Bitterness

…isn't the federal government awash in surpluses? Hasn't Alan Greenspan told us that our big economic problem is how to give the money away, lest politicians end up owning the stock market? If there's plenty of money for tax cuts, why won't the administration give the military at least some of what it wants and promise to keep its hand out of the Medicare cookie jar?

Because someone in the White House is aware of the truth, which is that there isn't plenty of money after all.

…Congress is about to go into a tax-cut feeding frenzy, adding huge tax breaks for corporations to Mr. Bush's proposal. The spectacle will be distressing, but it will be over quickly. Pretty soon, quite possibly as soon as this summer, we'll be worrying about deficits, not surpluses. 

That was on the one hand.

On the other hand, smug, delusional Conservative elites like those at the of The Weekly Standard had a lot of fun mocking Democrats as feeble-minded alarmists for worrying about Bush blowing the surplus.  

Because that would never happen.  Never, ever, ever.

In fact, hey look!  It's  David Brooks in The Weekly Standard in 2000, which is why we bloggers have archives.  Because The Weekly Standard doesn't exist anymore, but my archives do.  

The New Stupid Party

LONG AGO, the Republican party was nicknamed the Stupid Party, and at times Republicans have done their best to live up to the label. But after the past week, it is perhaps time to acknowledge that when it comes to brainless, self-destructive behavior, the Democratic party has achieved a level of excellence that will be unsurpassed in our lifetime.

Last week the Congressional Budget Office came out with a budget forecast. The report immediately got submerged in a chatterstorm about whether Congress or the White House would dip into something called the Social Security trust fund…

The Democratic party proceeded to work itself up into a collective aneurysm. Dick Gephardt—who, when given the chance to play the demagogue, never goes halfway—said that the United States now faces "an alarming fiscal crisis." Democratic national chairman Terry McAuliffe said on Face the Nation that it had taken Bill Clinton eight years to build up the surplus, but Bush was able to "blow it in eight months." Other Democrats rose up en masse to declare that the Bush administration was going to bankrupt Social Security/the federal government/western civilization because the administration was going to have to "raid the Social Security trust fund...

Democrats were bedwetting fools, Brooks’ assured his readers, because even with "...the economic slowdown, the Bush tax cut, and the recent congressional spending splurge…the surplus is still projected to grow to about $200 billion a year in 2004 and close to $300 billion a year by 2006."

This is Brooks again, in the Weekly Standard, March 16, 2001 entitled  "Yes, There Is a New Economy – Thanks to once-in-a lifetime productivity gains, Bush's plans are easily affordable"

It ends with this paragraph:

We are living at a once-in-a-generation moment of economic opportunity. As productivity grows, the economy will grow. As the economy grows, revenues will grow, maybe beyond what the CBO projects. The real question about the Bush tax cuts, then, is not, Can we afford them? The real question is, Why are they so small? 

Make a note of that  date.  March 16, 2001.  Because now were going to jump ahead a little over a year later, to a conversation between then-Treasury Secretary Paul O’Neill and Vice President Dick Cheney in November of 2002.  

This was reported in the Chicago Tribune, January 12, 2004 (emphasis added):

Former Treasury Secretary Paul O’Neill said he was told “deficits don’t matter” when he warned of a looming fiscal crisis.

In a new book chronicling his rocky two-year tenure and in an interview with CBS’s “60 Minutes” that aired Sunday, O’Neill also said President Bush balked at his more aggressive plan to combat corporate crime because of opposition from “the corporate crowd.”

O’Neill said he tried to warn Vice President Dick Cheney that growing budget deficits posed a threat to the economy.

Cheney cut him off, O’Neill said. “You know, Paul, Reagan proved deficits don’t matter,” he said, according to excerpts. Cheney continued: “We won the midterms. This is our due.”

A month later, in December 2002, Cheney told the Treasury secretary he was fired. 

The vice president’s office had no immediate comment. John Snow, who replaced O’Neill, said Bush is committed to cutting the deficits in half over the next five years.

But… but… there weren’t supposed to be any deficits.  There was going to be plenty of money for everything and, according to Extremely Respected Conservative Frauds, there always would be.

So, lets us review

• Where the hell did these deficits suddenly come from? And,  
• If, according to Republicans five minutes ago during the Clinton administration, deficits were worse than five Hitlers, how is it that now they’re not only nothing to worry about, but they are the rightful spoils of Republicans winning the midterms? and ,
• “Reagan proved deficits don’t matter”?  Really?  Kinda gives the game away doesn’t it?

Well, not really, since the media immediately buried that little tidbit in the same Memory Hole where they buried the rest of the failed Bush Administration.  And for the rest of the Bush administration, the deficit grew faster than any point in American history:

From CBS News, July 15, 2003:

Deficit Projections Soar to $455B

The Bush administration dramatically raised its budget deficit projections on Tuesday to $455 billion for this year and $475 billion for next, record levels fed by the limp economy, tax cuts and the battle against terrorism.

"The deficit certainly remains a concern, but it's one that is manageable and it's one that we are addressing," White House spokesman Scott McClellan told reporters. "Over the next few years, we will cut this deficit in half. It is a priority that we are addressing."

Damnit you, Ridley Scott! If only you'd have stopped Kingdom of Heaven and gotten your ass back into the Scary Commercial game, we wouldn't be in this mess.  

So having entered office with the Clinton/Gore budget surplus gift wrapped and waiting on his desk on the day they started office, what did the budget look like the day Bush and Cheney left office?

Well, combined with the Bush Administration's unpaid for Medicare prescription drug plan, the wars in Iraq and Afghanistan, an economy deep in recession, and several massive tax cuts, by the end of the Bush Administration, the annual federal budget deficit had climbed to $1.4 trillion.  And instead of paying off the national debt held by the public – which was one of the things Al Gore had proposed we do – the total national debt ballooned from $5.7 trillion in 2001 to $10.7 trillion by the end of 2008.

Then Barack Obama was elected, and in the face of the worst economic calamity in 75 years, the Republican party instantly flipped once again from the party of “Deficits, who cares?” to the party of “OMG, deficits have mysteriously appeared out of nowhere and the Kenyan Usurper must cut every social program, forget about saving the auto industry, forget about this crazy American Recovery and Reinvestment  Act, and pay the deficit down now!now!now!”

This was when the Republican party base passed through the Magical Bush-Off Machine and emerged as Tea Partiers who had never supported Bush and his ruinous policies,  never been politically active, and personally hated  Barack Obama with the heat of 1000 suns and blamed him for all the nation’s problems.  

This was when the legacy media agreed to collectively forget that everything you have read to this point ever happened, and focus exclusively on, "Why won't Obama lead?!?"

On December 31, 2012, Mr. David  Brooks –  The Man Who Swore There Would Never Be Deficits Again – used his New York Times column to lecture All Sensible People about what everyone should agree on regarding deficits:

...except for a few rabid debt-deniers, almost everybody agrees we have to do something fundamental to preserve these programs (Medicare, Social Security, etc.) The problem is that politicians have never found a politically possible way to begin. Every time they tried to reduce debt, they ended up borrowing more and making everything worse

So the problem is…"politicians"?

Not the Republicans who sabotaged every offer the Obama administration made to team-up to fix our collective problems.  Just…politicians

And Bush?  Bush who?  Never heard of him?  

Another group who are to blame?  “Voters”

Brooks again from December 31, 2012:

Ultimately, we should blame the American voters.... Many voters have decided they like spending a lot on themselves and pushing costs onto their children and grandchildren.

Anyone else?   Of course!  Because it wouldn't be a true David Brooks column without the inevitable Both Siderist razor in the apple:

A large number of reactionary Democrats reject any measure...

...yadda yadda yadda

And:

A large number of impotent Republicans talk about reducing the debt, but are incapable of...

...yadda yadda yadda,

But The Obama/Biden administration kept after it, dragging the economy back from the brink of disaster, all while Republicans and the mainstream media screamed that they should drop everything else and focus on nothing but massive budget cuts.

And slowly, things got better.  Even the deficit went down.

From PolitiFact, September 5, 2014:

At a union rally on Labor Day, Obama declared "We cut our deficits by more than half."

The numbers back up Obama’s claim:  Thanks to income tax revenues rising and spending on emergency assistance dropping, America’s deficit has fallen by more than 50 percent, from its highest point since World War II to a level $733 billion lower.

We rate the claim True.

Then came Trump who, despite all the shouting and snarling and whining from the Never Trumpers,  actually passes the “Is he a True Conservative?  Is he a Real Republican?” test with flying colors.

And what is that test?

C’mon kids, we just talked about this.

The only thing True Conservatives care about is cutting taxes for the rich. At all times and under all circumstances, there is no problem so great that they claim can’t be solved with a big enough tax cut.  Wars may come and go.  And all that blather about Abortion, Guns, the Border and Trans Right are just a means to getting enough meathead Republican base voters furious enough to vote enough Republicans elected so they could have more tax cuts.  

And during his first four years in office, what was Donald Trump’s only major legislative achievement?

What was the reaction from the Republican rank and file (fink and bile?) Rapture!  The Second Coming!  USA!USA!USA!

What did this do to the deficit?

Trump flacks like Steve Mnuchin were all over Fox News promising that this massive tax cut would somehow decrease the deficit by One Trillion Dollars.  From Fox Business, September 28, 2017:

Tax cut plan will cut deficit by $1T: Treasury Secretary Mnuchin

“We think there will be $2 trillion of growth so we think this tax plan will cut down the deficit by a trillion dollars—that’s a large number. We’re focused on growth. We think the 3% GDP is a very moderate aspiration and we can do higher than that,” Mnuchin told FOX Business’ Maria Bartiromo on “Mornings with Maria.”

If all this sounds eerily familiar, it should.  Once again, Trump and his henchmen have been throwing around these same colossal lies around to, once again, defend the indefensible.

Donald Trump, social media post, June 5, 2025:

This is one of the Greatest Bills ever presented to Congress. It’s a Record Cut in Expenses, $1.6 Trillion Dollars, and the Biggest Tax Cut ever given. If this Bill doesn’t pass, there will be a 68% Tax Increase, and things far worse than that. I didn’t create this mess, I’m just here to FIX IT.

Russell Vought, director of the White House Office of Management and Budget, social media post, June 4, 2025:

OMB just reviewed the new CBO score of the One Big Beautiful Bill. It confirms what we knew about the bill at House passage. The bill REDUCES deficits by $1.4 trillion over ten years when you adjust for CBO’s one big gimmick — not using a realistic current policy baseline. It includes $1.7 trillion in mandatory savings, the most in history. If you care about deficits and debt, this bill dramatically improves the fiscal picture.

But back during Trump 1.0, what was the actual effect on the deficit of Trump's giant tax cuts for the wealthy?  

From The Washington Post, January 14, 2021:

One of President Donald Trump’s lesser-known but profoundly damaging legacies will be the explosive rise in the national debt that occurred on his watch. The financial burden that he’s inflicted on our government will wreak havoc for decades, saddling our kids and grandkids with debt. The national debt has risen by almost $7.8 trillion during Trump’s time in office.

And the Republican party – from its leadership to the base to the propagandists on Fox – didn’t care one little bit.

Ah, but once Joe Biden was in office?

From Bloomberg News, October 24, 2023:

Deficit Worries Making a Return as a 2024 Political Issue

After lying dormant as an issue for the past couple of elections, the soaring US budget deficit is starting to matter again in Washington.

From the National Review,  March 24, 2023:

Taxing the Rich Isn’t the Way to Reduce the Deficit

From  The Cato Institute, MAY 4, 2023:

Biden's Budget Is an Unserious Attempt at Reining in Runaway Deficits

From The Heritage Foundation, Sep 27, 2023:

How Washington’s $7.5 Trillion Deficit Spending Spree Is Bankrupting America 

From the National Review, October 24, 2023:

Markets Are Sounding the Alarm on Deficits

From The Heritage Foundation yet again, November 3, 2023

The Fuse on America’s Debt Bomb Just Got Shorter

So, the question before us during this post has been,  "Is Trump a True Conservative?  Is he a Real Republican?"  

And the answer, obviously, unanimously and resoundingly is,  fuck yes!  Of course he is.  

He checks the only important box Republicans / Conservatives have ever truly cared about.  

What's more, he checks it strongly, powerfully, hugely, and bigly. 

And the party and the media are only to happy to follow his lead.

And now, for your viewing pleasure, Monster Chiller Horror Theatre presents Tip O’Neill’s 3D House of Representatives!

 

I Am The Liberal Media