I was doing some research for a piece on the latest ALICE report issued by the United Way of Northern New Jersey, when I came across a February 2006 story from the Gannett News Service about President Bush’s proposed 2007 federal budget.
Given the current debate about federal budgets, deficits, causes, blame and the price of tea in China, the article – granted it is not an exhaustive study — sheds some light on where we are today and provides an echo chamber for some of the current conversations.
A few tidbits about the 2007 federal budget:
The 2007 budget was 47 percent larger than Bush’s 2001 budget, and federal spending rose 8 percent a year during Bush’s first five years in office.
Federal tax revenue in 2007 was expected to be 17.9 percent of the U.S. economy, but federal spending was expected to be 19.8 percent of the national economy.
In other words the federal government was planning to spend about 2 percent more than it took in.
The article says this: “There is no single explanation why Bush has been unable to contain federal spending.”
Then it lists the following costs: “The costs of the wars in Iraq and Afghanistan (which the article said elsewhere were excluded from the annual Defense Department budget request), homeland security stemming from the Sept. 11 terrorists attacks, a jump in farm subsidies, the implementation of Bush’s No Child Left Behind education law and health care inflation in the Medicare and Medicaid programs have all contributed.
“The costly new prescription drug entitlement for seniors citizens will add to federal spending this year.”
Then there was this: “The 2007 budget is expected to propose more tax cuts – and expansion of tax-free health savings accounts and a higher deductible for certain health care costs.”
In other words, with a budget already in an annual deficit, Bush proposed more spending, but no way to pay for it: “The Bush tax cuts increase the number of Americans who don’t owe income taxes because they did not make enough in wages or because they took hefty deductions.”
The impact on the federal budget of the Bush tax cuts, the article said, was measurable: The IRS reported in 2001 that 35.4 million federal income tax filers did not owe federal tax. That number rose 6 million by 2003 to 41.5 million tax filers.
The economic cliff we are facing now was looming even then.
Nationally, the county was 1 million jobs behind traditional post-recession recovery periods, having faced slow job creation following end of a recession in 2001. Records would show that job creation in the Bush administration before the Wall Street crash was the slowest since the Hoover Administration during the start of the Great Depression.
Then in September 2008, Wall Street crashed and we’ve been slogging through the mess ever since.
I don’t raise this issue to point out the obvious, but to ponder how we recover.
As part of my research I looked stories I wrote for the Daily Record in 2004 about the job situation in Morris County, N.J.
I was struck by how many of the people I interviewed for those nine stories were technology professionals, engineers or those with advanced degrees working for many of the leading communications, pharmaceutical and technical companies in the state.
I was also struck again – even though I remembered many of these statistics — how few higher paying jobs the state labor department was projecting would be created through this year. When the number of openings for janitors far exceeds the projected number of openings for software engineers, it is the sign of an economy sliding in the wrong direction.
And today we harvest that bitter fruit. The fastest growing segment of the economy is service jobs. All those new casino jobs won’t revive the state’s economy.
The Great Depression ended in part when the nation geared up for war. Millions of men were drafted into the armed services and millions of women took their place on the production lines.
In the 1950s the war economy was replaced by the growth of the suburbs supported by the GI Bill and the interstate highway system.
All fueled by federal spending.
But in this economy we’ve been at war for more than a dozen years, and past budget mistakes and a lack of political will leave the country at loggerheads while federal spending is as popular as the measles.
We have no new highways to build, just systems that need repair; products we use are made around the world, but the U.S., because it is still the world’s largest economy, is expected to buy most of them.
Since we have been aiming for this cliff for more than a decade, you’d think we could avoid falling over.
We are smarter than that.
Michael Stephen Daigle
- The award-winning ‘Weight of Living’
- An old rose
- More New Nagler: Frank’s own darkness
- A new review of the Frank Nagler Mysteries. Warning: contains high praise (and the author is stunned)
- The absolute truth about why there is a Statue Of Liberty at Garland Pond
- The earth is leaking
- June is Audiobook Month — And I have one
- We are West Hartley Parkway