The Stimulus Myth: Debt Is Not Our Problem
A tale was created for the 2010 elections by Conservatives to create a “tax and spend” myth about Obama. The debt was projected by the CBO well before Obama took office in 2009, but Republicans needed to deflect attention away from the real causes: Bush recession killing the economy, Bush tax cuts killing revenues, Bush bailouts spiking the debt.
The myth manufactured was that a trillion dollars in stimulus spending had somehow caused the huge increase in the deficit in 2009. However, stimulus spending in 2009, was just over 100 billion according to the CBO’s Oct 7, 2009 monthly budget review - not one trillion
The stimulus was 1/3 tax cuts which left roughly 500 billion in spending that was ‘divided up’ & went out over several years.
Before Obama took office in 2009, the deficit was already projected at 1.186 trillion & spending at 3543 billion. However, after Obama took office, 3518 billion was spent, which was 25 billion less than had been projected under Bush.
The increase in the deficit to 1.413 trillion by the end of the fiscal year 2009 when compared to the projection of 1.186 trillion made by the CBO before Obama took office, was from 252 billion more in lost revenue from the collapse, not additional spending.
Stimulus spending did not cause the large increase in the deficit in 2009 & deficits declined each year after 2009, even with some additional stimulus spending, because stopping the collapse allowed [tax] revenues to recover.
From death panels, to birth certificates, to deficits - not one single thing the Tea Party protested against was real.
Some facts on our debt:
The interest cost of our debt is 1% of our GDP which is easily managed.
The federal government can borrow for 30 years at less than 4% interest with no collateral.
The Federal Reserve buys our debt and when it does all the interest is refunded to the Treasury.
Given these FACTS, why is our debt a problem? We have been in debt for over 80 straight years and that has NEVER been a problem for us
The Tea Party was never about fiscal responsibility and they were never honest about the stimulus. The fact is, the stimulus worked and should have been bigger to get more people back on their feet.
Millennials were robbed from having a fair shot at starting off due to Republican austerity and “a black President will never tell me what to do” Tea Party racism.