Ann Arbor-born economist and historian Bruce Bartlett, who served as domestic policy advisor to Ronald Reagan, and in the Treasury under George H.W. Bush, joined Chris Mathews on MSNBC’s Hardball yesterday, talking about the true origins of our nation’s current deficit. It should be required viewing for all Americans… Here’s the video, followed by an excerpt from the transcript.
MATHEWS: Bruce Bartlett is former Deputy Assistant Treasury Secretary under the first George Bush and a policy adviser to Ronald Reagan. Bottom line, let’s look at the numbers right now. We’ve got a chart coming up. This shows the Bush tax cuts were responsible for increasing the debts. Now, we have about a $14 trillion debt right now, half came out since the turn of the century, and more than 40% of that has been from tax cuts.
BARTLETT: That’s right. When Bush took office, we had a debt of about $6 trillion. The projections from the CBO were that we were going to run a $6 trillion surplus. By this point, if we had done nothing, we would have paid off the dead debt, but we added about $3 trillion of tax cuts. We lost about $3 trillion of revenue because of the slower economy and added about $6 trillion of spending, largely due to two unfinished wars, Medicare drug benefits and a lot of other things. So, instead of getting — paying off the debt — we ended up with about a $14 trillion debt.
MATHEWS: Some of these clowns, not all of them, running around saying Barack Obama is a Socialist, he drove up the national debt to $14 trillion and dance around in a circle and congratulate each other. That’s not true.
BARTLETT: No, I think the dirty secret is that Obama is a moderate conservative. If I were a liberal democrat, I probably would be upset.
MATHEWS: The point is a $1 trillion debt, and another… is from the prescription drug bill. The rest of that is from a lousy economy under Bush and these two wars he came up with.
BARTLETT: That’s right. The Republicans keep saying the tax cuts are the key to prosperity. The 2000′s are evidence that that is not true. We had booming economies in the 1980s and ’90s. If we went back to those taxes, we would be better off.
MATHEWS: What is the argument against the kind of tax policy– let’s just say it again. It seems like a heck of a great economy with the tax rate of about 39.6, as opposed to 35?
MATHEWS: That’s the ones the rich bitch about, to use a crude term. That helped balance the budget.
BARTLETT: That’s right. Don’t forget that Ronald Reagan raised the capital gains rate, and now it’s only 15%, and of course the wealthier you are, the more of your income comes from capital gains.
MATHEWS: We showed the 400 richest people in the country. They pay about the same as a poor person pays, about 18%.
BARTLETT: That’s right – of income taxes – that’s right.
MATHEWS: Whereas the middle class, who think they are the majority of the country, they’re paying a higher rate.
BARTLETT: That’s right. I don’t think there’s any question that there would be positive economic effects if we went back to those tax rates.
MATHEWS: How come I need to drag you on the show — the fact is, just a simple math, we have a $14 trillion debt, half came from the Bush era, almost, and the rest came from the prescription drug bill, and with a terrible economy and the two wars that he promulgated. That’s simple math there.
BARTLETT: That’s right, but in the Republican playbook, of course, the deficit is never caused by tax cuts…
And, here’s that chart that they were mentioning, which clearly shows why we’re in the state we’re in, and who’s responsible.
Now, if we could just get ourselves a leader who could could fight for the following three things…
1. End the Bush tax cuts.
2. Allow Medicare and Medicaid to negotiate for lower prescription drug prices.
3. Begin the process of ending the Bush wars, and trimming the military budget.
If we could do just those three things, our country would be back on the path to prosperity. But, of course, it won’t happen, as everyone knows that our country is going bankrupt because of that damned Socialist in the White House and his insane spending on the poor, right?
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