, Newburyport, MA

October 30, 2012

Cutting through the murk of campaign politics

Newburyport Daily News

---- — To the editor:

Elections seem to be murky smoke and mirror affairs. The candidates generally further obfuscate rather than clarify the issues. The economy is no doubt the first and foremost issue of national political concern. The national debt is brought up constantly as a talking point.

Remember the trickle-down theory promoted by President Reagan? It was the turning point for conservative Republican influence in the economic arena. The Reagan tax cut still lives as legend in the minds of Republicans. Effective tax rates on those making a living wage or less went up while the rates for the very rich went down. The end result of this exercise was an increase in the national debt from $900 billion to $2.8 trillion — tripling the national debt! In eight years, the U.S. went from the world’s biggest creditor to the world’s biggest debtor — not a great legacy for a self-proclaimed fiscal conservative.

Bush 41 was forced to deal with his predecessor’s debt and was out-maneuvered into raising taxes and losing his chance for a second term. Still, the national debt increased to $4.1 trillion (about 50 percent in four years). So much for dealing with the debt responsibly.

President Clinton was favored with the biggest economic expansion in decades. After many battles with a Republican Congress, the country was left in the strongest economic condition in recent history. The national debt increased to $5.6 trillion (about 40 percent in eight years). The Office of Management and Budget MB had forecast a $5 trillion surplus over the next decade. What happened to that?

Enter Bush 43. What did this fiscally conservative Republican do? He recommended and signed a tax cut that completely squandered the OMB’s predicted surplus. A surplus which would have paid off the national debt. He then started two wars with no plan to pay for them. He created an entirely new cabinet department. One of his last acts was to sign the $700 billion TARP bill, which immediately was used to force feed $125 billion into the big Wall Street banks. These same banks had sold their toxic mortgage assets to European banks, thereby spreading our recession world-wide. The net result was an increase in the national debt from $5.6 trillion to $11.3 trillion — doubling the national debt in eight years!

In the last four years during the Obama administration $6 trillion has been added to the debt, mostly to keep the country afloat financially. Think of it as servicing the credit card debt run up by the last administration. This is equivalent to a 50 percent increase (modest by Republican standards) and much better than a full blown depression.

Historically, since the 1970s, Democratic administrations have reduced the growth of the national debt while Republican administrations have increased the growth of the debt. If Mitt Romney really believes he can reduce debt growth by cutting taxes, the odds are not in our favor. Myself, I believe he is just trying to fool enough voters to get himself elected.