The drivers of our debt, cont’d

Congressional Republicans frequently talk about their desire to talk about “the drivers of our debt.” I’m not sure why — an honest look at the larger fiscal dynamic is invariably embarrassing for the GOP.

This is usually the point at which I link this famous chart from the Center on Budget and Policy Priorities, which tells quite a story. It shows that to understand why the deficit is as large as it is, one need look no further than the Bush-era tax cuts and Bush-era wars.

But the fine folks at the CBPP have a new image that, to my mind, drives the larger point home even better. Chad Stone, the CBPP’s chief economist, posted this item this morning showing the drivers of U.S. debt over a two-decade span. Stone explained:

The complementary chart … shows that the Bush-era tax cuts and the Iraq and Afghanistan wars — including their associated interest costs — account for almost half of the projected public debt in 2019 (measured as a share of the economy) if we continue current policies.

Altogether, the economic downturn, the measures enacted to combat it (including the 2009 Recovery Act), and the financial rescue legislation play a smaller role in the projected debt increase over the next decade. […]

We focus here on debt held by the public, which reflects funds that the federal government borrows in credit markets to finance deficits and other cash needs. That’s the proper measure on which to focus because it’s what really affects the economy. We compare it to GDP because stabilizing the debt-to-GDP ratio is a key test of fiscal sustainability. […]

[S]imply letting the Bush tax cuts expire on schedule (or paying for any portions that policymakers decide to extend) would stabilize the debt-to-GDP ratio for the next decade.

And here’s the image:

A GOP House member recently said it’s “insane” to hold Bush-era policies responsible for current and future debts. But that’s the opposite of the truth — policies adopted during the Bush era carry lasting consequences and left a mess that will take a very long time to clean up.

Republicans may find these details inconvenient, but that doesn’t make them false.