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If you are old enough to be on Medicare, you should remember the glory days when the U.S. economy was flourishing. The treasury had a positive balance, a comfortable surplus and good times were ahead.
Those were the Clinton years. Debt was around 30 percent of gross domestic product and falling. What could go wrong?
President George W. Bush handed out huge tax cuts with people in the top brackets getting the biggest breaks.
There was talk that people's estates were losing too much in estate taxes. People buying yachts were paying too much tax. So taxes were tamped down at the top levels.
In January 2001, Bush's treasury secretary asked Congress to raise the debt ceiling by more than $500 million. There had been no debt ceiling vote since 1997, but the tax cuts were having their effect. The Republican-dominated Congress voted to increase the Treasury's borrowing authority to pay for the deficit-funded tax cuts. They did so eight times. That set the pattern and the end of the surplus. Now add in the economic downturn and our two big wars and you understand the deficit.
Could we reverse the process? One plan is to let the Bush tax cuts expire as they would unless extended by Congress. Revenues will rise gradually. If the tax cuts are extended, we will continue to sink.
Adele Kushner
Alto