Monday, December 17, 2007

Worth every penny?

The U.S. Treasury has just issued the 2007 Financial Report of the U.S. Government, available here.

Money quote, from page 32 of the document:

"[The report's measure of the long-term U.S. fiscal gap] totaled approximately $53 trillion as of September 30, 2007 ... an increase of more than $32 trillion from about $20 trillion as of September 30, 2000. This translates into a burden of about $175,000 per American or approximately $455,000 per American household."

Of the entire U.S. historical total, more than 60 percent arose under Bush. A bit of it comes from simple accrual of interest on the preexisting fiscal gap, plus changed assumptions may have had some impact. But the bulk of it comes from massive tax cuts, spending increases, and the Medicare prescription drug abomination.

These figures arguably are grossly under-stated relative to Bush's actual policy, because they ignore the revenue cost of making his tax cuts permanent (as he urges, admittedly it seems ineffectually) and fixing the alternative minimum tax. I couldn't quickly find a contemporaneous estimate for those changes, but the ten-year (2008-2017) estimate for extending the tax cuts and fixing the AMT is $3.5 trillion according to a report by the Center for Budget and Policy Priorities, available here. This report also states that extending the Bush tax cuts would double the expected size of the national debt relative to the economy in 2050.

Just to make the Bush share of the overall fiscal gap more tangible, even without these changes in the current baseline that he is urging, developments on his watch, which overwhelmingly are the fruit of his policy moves, have run up the tab by about $106,000 per American or $275,000 per household.

That is quite a tab for a not very enjoyable bash.

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