By IBTimes Staff Reporter: Subscribe to IBTimes's RSS feed
September 3, 2011 1:23 PM EDT
Tea Party members and other conservatives assert that the United States' problems started in 2009, but nothing could be further from the truth, as the three biggest factors that set the nation on the wrong fiscal course were public policy mistakes made by President George W. Bush from 2001 through 2008.
What's more, saying the United States' problems started in 2009 is like saying President Herbert Hoover's plan in 1932 to end the Great Depression -- Hoover did nothing -- was effective.
Similarly, Tea Party members, like Hoover, believe that cutting federal spending even more will increase demand: it won't -- it will increase U.S. unemployment and slow the economy even more.
Further, the sooner the nation corrects those three George W. Bush-enacted mistakes, the sooner the nation will return to balanced budget, strong U.S. GDP growth and job growth. The mistakes are:
1. 2001 Bush Income Tax Cut
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The biggest mistake, or the factor that most contributed to S&P's downgrade of the U.S. Government was the 2001 Bush Income Tax Cut.
The $1.35 trillion tax cut -- a tax cut that many economists and policy professionals felt was not necessary from a stimulus standpoint, given that the U.S. economy was already recovering from the mini 2001 recession -- instantaneously turned a U.S. Government budget surplus into a budget deficit.
You read correctly: President Bill Clinton, D-Ark., in fiscal 2001 -- the Clinton administration's last fiscal year -- was the last president to run a budget surplus: the Clinton administration notched a $127.3 billion surplus in fiscal 2001 -- the fourth consecutive year of surpluses.
President George W. Bush's 2001 income tax cut instantaneously turned a $127.3 billion budget surplus into a -$157.8 billion budget deficit in fiscal 2002, and the U.S. Government has had trouble balancing its budget ever since.
The Bush administration, 2001-2008, fiscal 2002 to fiscal 2009, then ran the following deficits:
Fiscal 2003: -$374 billion deficit
Fiscal 2004: -$413 billion deficit
Fiscal 2005: -$319 billion deficit
Fiscal 2006: -$248 billion deficit
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