Twenty-Five Years of Cannibalism

 

Jack Rasmus has an excellent summing-up of the costs of over two decades of idiotic tax-cuts to the oligarchy and reckless war spending.

That bigger picture is the looming fiscal crisis driven by the growing convergence of runaway tax cutting since 2001, chronic escalating defense and war spending, more frequent deeper crashes of the economy with slower economic growth between, and now since 2022 accelerating trillion dollar annual interest costs on the US national debt.

The US national debt is on track to reach $38 trillion by year end 2025. Interest payments to bondholders are already exceeding $1 trillion a year. The Congressional Budget Office, research arm of the US Congress, estimates the national debt will reach $56 trillion by 2034 with interest payments of $1.7 trillion — and all that before Trump just passed $5 trillion tax cuts.

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George W. Bush’s tax cuts in 2001-03 amounted to $3.8 trillion over the decade 2001-10. Estimates are roughly 80% accrued to corporations, businesses, and wealthy individuals by focusing overwhelmingly on individual income tax rates, corporate capital gains and dividends, and the estate tax affecting the wealthiest 1% or less households. Bush then cut taxes in the spring of 2008 by another $180 billion as the economy began to slide into recession and the great crash of 2008-09.

When Obama took over in 2009 his American Rescue Plan stimulus for the economy passed that March provided for another $325 billion in tax cuts. His entire stimulus plan was $787 billion, another $280 billion of the remaining $487 billion went to the states which then hoarded most of it. 

So less than $200 billion went to stimulate consumption which immediately proved too little to reboot the US economy. He had to add another $25 billion for ‘cash for auto clunkers’ and another $25B for ‘first time home buyers’ later that year. Most of the latter, moreover, didn’t go to home buyers but to mortgage lenders as incentive to approve more mortgages.

When Bush’s tax cuts came up for renewal in 2010, Obama extended them for another two years through 2012. That amounted to another $803 billion in tax cuts, again mostly to wealthy and corporations.

In August 2011, in an agreement with the Republican Congress, Obama cut social program spending by $1.5 trillion in a new ‘austerity’ plan. $1 trillion was cut in just education and other social programs; $.5 trillion was supposed to be cut for defense spending but was kicked down the road and never applied. 

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The 2012 Obama tax cuts made the Bush tax cuts permanent. They cost another $5 trillion. They were supposed to avoid what the media, lobbyists, and propagandists called the pending ‘fiscal cliff’. They were supposed to boost the economy. 

They didn’t. US economic growth in GDP terms for the rest of the Obama term averaged only 60% of what was historically average during recovery periods from the earlier 10 US recessions since 1948.

When they talk about the debt and deficit of the USA they are talking about a government that chooses to not tax its wealthiest citizens and institutions.  There are tens of billions in annual foregone revenues.  Meanwhile, the bulk of the population sinks into deepening economic insecurity and indebtedness.

This entire nightmare period we're living through is the end of the line for this policy of cannibalizing the real economy to produce nominally rising incomes for the oligarch class.