When Joseph was Pharoah's advisor, he warned that 7 good years would be followed by 7 bad years. The response was wise. They spent the 7 good years saving grain (i.e. running a surplus) so that they would be able to use the stockpiled grain (i.e. run a deficit) during the 7 bad years. The analogy is far from perfect, but the underlying point holds true in modern times. While the economy was good pre-Obama, we should have been "hording grain". Instead, we were cutting taxes and running up deficits. The tax cuts might have made the good times even better, but they weren't prudent. When the economy began to fall apart, we didn't have any grain in the warehouse. Thus, to avoid a total meltdown, Obama had no choice but to increase the deficits to dangerous levels.
NJ, The analogy would make more sense if a lack of revenue was actually driving the deficit. Revenue is a little higher than it was in 2006 (around $2.46 trillion). However, we've added almost $1.2 trillion in annual spending since 2006 and are expected to spend almost $3.8 trillion in 2012. I know people don't like looking at numbers because it's boring, but as a practical matter, there's no amount of tax increases we could have reasonably passed to make up for that big of a spending hike, and not having the Bush tax cuts wouldn't have even made a significant dent. This is why though I don't like the GOP or Mitt Romney, I can't vote for Obama or become a Democrat. When they use the Bush tax cuts as an excuse for our deficit issues, they take a position that is completely and utterly indefensible once you look at objective numbers. It's nothing more than a diversion to keep from addressing the $1.2 trillion of annual spending.
I agree that going back in time and eliminating the Bush tax cuts would make little difference. But I think the fault is much deeper than the tax cuts alone. In my playbook, if I were in charge, I would have slashed spending during the Bush years without cutting taxes. The result would have been huge annual surplusses, which would have put a large dent in the debt. If we had done this, we probably would've never gotten the unsustainable growth, which lead to the bubble, which lead to the crash. But even if we got the crash, we would have been in a better position to borrow responsibly. Please note that I'm not putting the blame at President Bush's feet. Neither the Repuplicans nor the Democrats wanted to be fiscally resonsible, so there is enough blame to go around. We did manage in the late 1990s to run small surplusses for a few years, with moderate Democrats and moderate Republicans working together to squelch their respective radical wings. I thoguht we were on the right track. But that all fell apart somwhere around 9/11.
It is not really an appropriate analogy to me in that we in general have an economy that features secular growth. Smaller economies that depend on boom/bust commodity cycles are probably a better reference point. Most LatAm governments don't hoard for the dark times and suffer as a result because the bottom falls out of their economies regularly due to predictable external factors that are out of their control. A better analogy is a corporation with a stable underlying business that is mismanaged due to totally brain-dead executive management more interested in lining their pockets than tending to the underlying strengths of the business. We could get new management in and fix things but so far most of the shareholders want to talk about the basketball prowess of the CEO or how the CFO is very inspiring when giving speeches. It doesn't matter that the execs are levering up the company beyond any reasonable debt servicing capacity and reinvesting the borrowed funds in corporate jets, expensive furniture, and speculative projects everyone thinks is insane.
That is why I hope GOP still retains the House after this election. And Boehner would negotiate and agree to a deal that every dollar raised in revenue has to associate with several dollars cut in budget. The same deal that he rejected due to tea party folks. That would be a win for all Americans.
