25 Things We Learned During The Debt Crisis

(Click here for larger image.) If nothing else, the debt ceiling crisis provided what Barack Obama is so fond of calling a "teachable moment." Hopefully, that extends to the President himself. After seeing his nominees blocked, his

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(Click here for larger image.)

If nothing else, the debt ceiling crisis provided what Barack Obama is so fond of calling a "teachable moment." Hopefully, that extends to the President himself. After seeing his nominees blocked, his legislation filibustered and popular upper-income tax increases delayed by Republicans who withheld their support from his watered down stimulus and health care programs, President Obama nevertheless continued to seek common ground with those whose only goal remains his political destruction. The result was as painful as it was predictable.

As for the rest of us, here are 25 things we learned during the debt crisis.

(1) We learned that Republicans really care about the national debt, but only when a Democrat is in the White House. As Dick Cheney put it, "Reagan proved deficits don't matter."

(2) We learned that the national debt tripled under Ronald Reagan, forcing him to raise the debt ceiling 17 times. Overwhelmed by the torrents of red ink unleashed by his supply-side tax cuts of 1981, Reagan raised taxes eleven times while in office. (His deficit reduction initiatives of 1982, 1984 and 1987 relied on over 75% in new tax revenue.) It's no wonder Reagan called the mountain of debt he bequeathed to America his greatest regret.

(3) We learned that George W. Bush nearly doubled the national debt, leaving Barack Obama a $1.2 trillion annual deficit and almost $11 trillion in debt on January 20, 2009.

(4) We learned that the Bush tax cuts were the single biggest factor in erasing the projected surpluses Dubya inherited from Bill Clinton. The Bush tax cuts of 2001 and 2003 accounted for almost half of the red ink during his tenure, and if made permanent, would contribute more to the debt over the next decade than Iraq, Afghanistan, the recession, the stimulus and TARP combined.

(5) We learned that tax cuts don't "pay for themselves" or "always increase revenues." Only in 2005 did federal tax revenue reach the pre-Bush tax cut levels of 2000.

(6) We learned that the Republicans' so-called job creators don't create jobs when their taxes are low. In fact, the data show that the far more jobs were created and the economy grew much more quickly when the top 1% of income earners paid higher - even much higher - taxes.

(7) We learned that for John Boehner, some "spending binges" are more equal than others. While spending under Barack Obama rose by about 10% from George W. Bush's last budget in FY 2009, federal outlays almost doubled between 2001 and 2009. As it turns out, the two unfunded wars in Afghanistan and Iraq, the budget-busting Bush tax cuts of 2001 and 2003 (the first war-time tax cut in modern U.S. history) and the Medicare prescription drug program drained the U.S. Treasury. Mitch McConnell, John Boehner and Eric Cantor voted for all of it.

(8) We learned that Republicans have short memories. When Eric Cantor complained recently that "what I don't think the White House understands is how difficult it is for fiscal conservatives to say they're going to vote for a debt ceiling increase," he apparently forgot that Republican majorities voted seven times to raise the debt limit under President Bush. Along with John Boehner, Mitch McConnell and Jon Kyl, Cantor and the current GOP leadership team voted a combined 19 times to increase George W. Bush's borrowing authority by $4 trillion. (That vote tally included a "clean" debt ceiling increase in 2004, backed by 98 current House Republicans and 31 sitting GOP Senators.)

(9) We learned that Republicans are bad at genetics, too. Last Friday, Texas Rep. Jeb Hensarling claimed that for Republicans, raising the debt ceiling is "contrary to our DNA."

(10) We learned that in rare moments of candor, Republicans can speak the truth. In January, Speaker Boehner acknowledged that failure to raise the debt ceiling would cause "financial disaster." And Utah Senator Orrin Hatch explained that when President Bush was in the White House, for Republicans "it was standard practice not to pay for things."

(11) We learned that every budget plan on the table adds trillions to the national debt over the next decade. President Obama's April proposal ($7 trillion), this week's debt ceiling compromise ($7 trillion) the Simpson Bowles Commission ($5 trillion) and even the Ryan budget ($6 trillion) backed by 235 House Republicans and 40 GOP Senators all continue to build the U.S. mountain of debt.

(12) We learned that despite the promises of right-wing bloggers and Tea Party darlings like Florida Senator Marco Rubio, this will not be "the last time" they have to raise the debt ceiling. The Ryan budget 98% of Republicans in Congress voted for will require the debt limit to be raised repeatedly. In April, Speaker Boehner admitted as much.

(13) We learned that the budgets of Paul Ryan and Ronald Reagan would have violated the spending targets of the Republicans' own balanced budget amendment to the Constitution and "Cut, Cap and Balance" scheme..

(14) We learned that the total federal tax burden as a percentage of the U.S. economy (now just 14.9%) is at its lowest level in 60 years.

(15) We learned that income inequality is at its highest level in 80 years. Between 2001 and 2007- a period during which poverty was rising and average household income had fallen - the 400 richest taxpayers saw their incomes double to an average of $345 million even as their effective tax rate was virtually halved.

(16) We learned that Republicans would rather give trillions more in tax cuts (and with them, new windfalls for the wealthy) than fight the debt. Their Treasury-draining tax cut proposals range from the Ryan budget's $4.2 trillion tax cut giveaway over the next decade to Tim Pawlenty's jaw-dropping $11.6 trillion ocean of red ink.

(17) We learned that Republicans would even rather slash defense spending than raise one penny of new tax revenue from America's wealthiest individuals and most profitable corporations.

(18) We learned that the steep spending cuts this week's debt ceiling deal could cost up to 1.8 million jobs while hammering already cash-strapped state and local governments. And in case we needed any more lessons on the hopelessness of austerity, in the UK economic growth has flat-lined and household incomes are forecast to fall by the IMF by £1,500 as a result of the draconian Tory program.

(19) We learned that a default by the United States would be a "calamity," at least according to the consensus of economists, Federal Reserve Chairman Ben Bernanke, Wall Street rating agencies and the U.S. Chamber of Commerce.

(20) We learned that Republicans nevertheless had no problem with creating economic "uncertainty" over the possibility of a cataclysmic default by the United States. They only uncertainty John Boehner and Mitch McConnell cared about was whether the richest Americans would continue to get tax breaks that should have expired on January 1st.

(21) We learned that virtually every major Republican presidential candidate was either against raising the debt ceiling period (Bachmann, Pawlenty) or only doing so on the condition of the passage of the Republicans' "Cut, Cap and Balance" Act (Romney). All but Jon Huntsman would apparently have voted no on this week's deal.

(22) We learned that Mark Twain was right when he said "a lie can run around the world six times while the truth is still trying to put on its pants" and what happens when virtually every Republican talking point is "not intended to be a factual statement." In May, polls by CBS and Gallup showed that Americans by a 2-to-1 margin opposed raising the nation's $14.3 trillion debt ceiling. (Among Republicans, the gap was a staggering 70% to 8%.) Only as the August deadline approached did the tide begin to turn. Thanks to the increasingly dire warnings of economists, think tanks, international financial bodies and even GOP-friendly business groups, by July a Pew Research survey showed Americans were evenly split as to whether raising the debt or defaulting on U.S. debt obligations was the greater concern.

(23) We learned that Republicans who compared President Obama and his supporters to Nazis, Soviets, communists, terrorists and the godless don't themselves like to be called "terrorists." They should take up their complaint with Bush Treasury Secretary Paul O'Neill who said in April, "the people who are threatening not to pass the debt ceiling are our version of al Qaeda terrorists."

(24) We learned that President Bill Clinton did not give in to John Boehner's extortion in November 1995 when Boehner warned, "Nobody should assume we're going to have a debt-limit extension. If the vote were held today, it would not pass."

(25) We learned from House Minority Leader Mitch McConnell what happens when Democrats give in to Republican blackmail. For the GOP, the debt ceiling hostage-taking drama will "set the template for the future." As ThinkProgress noted, McConnell “said he could imagine doing this again" and has promised he will do so.

(This piece also appears at Perrspectives.)

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