Subject: [big campaign] Wonk Room: McCain would create biggest debt since WWII
From: "Adam Jentleson @ American Progress Action" <[email-masked]>
To: "big campaign" <[email-masked]>
Date: Thu, 15 May 2008 14:18:36 -0400
List-Id: <bigcampaign.googlegroups.com>

New report from the Wonk Room.  Great charts and the full analysis at
the link.

-AJ

McCain's Budget Would Create Largest Deficit In 25 Years, Largest Debt
Since WWII
<http://thinkprogress.org/wonkroom/2008/05/15/mccain-deficit/> >

Sen. John McCain promises
<http://news.yahoo.com/s/bloomberg/20080418/pl_bloomberg/a72l7_aj5p9c>
that, as president, he would "cut taxes and balance the budget." But his
current economic plan would create deficits as deep as 5.7% of GDP by
the end of a two term presidency - the highest federal budget deficit in
25 years - and would accumulate the biggest debt
<http://www.whitehouse.gov/omb/budget/fy2009/pdf/hist.pdf>  since the
second World War, according to a new analysis
<http://thinkprogress.org/wonkroom/wp-content/uploads/2008/05/budget.pdf
>  by the Center for American Progress Action Fund. McCain's current
fiscal plan would recklessly exacerbate the fiscal irresponsibility of
the Bush Administration further by gutting revenues far below the
average level of the past 25 years.

For the past 25 years, deficits have never been more severe
<http://thinkprogress.org/wonkroom/wp-content/uploads/2008/05/budget.pdf
>  than 5% of GDP, with surpluses
<http://www.cbo.gov/ftpdocs/89xx/doc8917/01-23-2008_BudgetOutlook.pdf>
as high as 2.4% of GDP in the year 2000. Under McCain, yearly deficits
would increase sharply, beginning with $505 billion in FY2009 (3.4% of
GDP) and skyrocket to $1.2 trillion (5.7% of GDP) by FY2017. In 2018
these deficits would reach 6% of GDP, tied with the largest deficits
since WW2 in 1983. Current Bush policies would keep the deficit
<http://thinkprogress.org/wonkroom/wp-content/uploads/2008/05/budget.pdf
>  in 2017 to $660 billion (3.1% of GDP).

According to the study, McCain's economic plan, (which includes a
corporate tax cut, a full repeal of the AMT, and an extension of the
Bush tax cuts) would leave a debt of $12.7 trillion (the highest since
1951 <http://www.whitehouse.gov/omb/budget/fy2009/pdf/hist.pdf>  when
America was still holding debt from WW2) by the last budget of a two
term presidency starting in 2009 (FY2017). This debt is $3.5 trillion
more severe than the one resulting from an extension of current Bush
policy, which would leave a debt of $9.2 trillion (43% of projected
GDP).

McCain would slash government revenues, which have averaged 18.3% of GDP
for the past 25 years, to their lowest levels since before 1962.
Revenues would average only 16.3 percent of GDP for the duration of his
two terms. Under current Bush policy, revenues would remain above 18
percent of GDP.

This analysis
<http://thinkprogress.org/wonkroom/wp-content/uploads/2008/05/budget.pdf
>  currently incorporates the most generous possible savings McCain has
offered thus far: an $18 billion cut of wasteful earmarks and a $15
billion "freeze" in wasteful spending, with the savings grown at the
rate of GDP growth over his presidency. These "savings," which come no
where near paying for his reckless tax cuts, already include "heavy cuts
<http://www.americanprogressaction.org/issues/2008/pdf/tax_agenda.pdf>
in after-school programs, student aid, public broadcasting, and job
training." To fill the gaping remaining hole, McCain supporters have
suggested policies that would lead to "massive cuts
<http://thinkprogress.org/wonkroom/2008/05/06/one-two-punch/> " in
Social Security.

Read the full report
<http://thinkprogress.org/wonkroom/wp-content/uploads/2008/05/budget.pdf
> .

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