Perhaps no issue has received more media coverage and less illumination over the past year than the U.S. budget deficit, so to help clarify matters, let's do what the late, great governor of New York Al Smith would do: "Let's look at the record."

As a baseline, let's begin with the fact that Congressional Budget Office estimates the deficit will total $1.42 trillion in fiscal 2010 and $1.15 trillion in fiscal 2011. Those numbers look huge, but let me state that if the United States needs to increase the deficit to provide additional stimulus to get this economy moving again, it should do so. As economist John Maynard Keynes demonstrated, incurring short-term deficits while an economy is in a recession and operating well below its potential is not a serious policy flaw. The bigger problem facing the United States now is a weak economy that isn't creating enough jobs, not the deficit.

Second, the budget deficit is not as big a problem as some assert. To see why, let's review some research compiled by the Center on Budget and Policy Priorities (CBPP), a liberal, Washington, D.C.-based think tank.

How Did We Dig Such a Deep Hole?

The CBPP dug into the root causes of our current $1.42 trillion deficit, and found three primary culprits: The 2001 Bush tax cuts, spending for the Iraq and Afghanistan wars, and the Great Recession, which started in December 2007, more than a year before President George W. Bush left office. Here's how the elimination or the end of each would improve the nation's fiscal condition in 2011, assuming stimulus spending is allowed to decline, as expected, to $176 billion.

• If the Bush tax cuts are allowed to expire, as the law currently calls for, that will decrease the fiscal 2011 deficit by $295 billion.

• U.S. deployments in Iraq and Afghanistan will cost about $193 billion in fiscal 2011. Had these deployments not occurred, the next year's deficit would be roughly $200 billion smaller.

• Finally, the Great Recession, which has eliminated more than 8 million jobs, will reduce federal tax and fee revenue -- particularly from the income tax -- to the tune of $400 billion in fiscal 2011, the CBPP forecasts.

Add the three up and they account for $888 billion, or 77.2% of the projected fiscal 2011 $1.15 trillion budget deficit.

Let's be clear: Despite the claims of those on the right of the political spectrum that the policies of the Obama administration are to blame for the bulk of the nation's deficits, it simply isn't true. The large majority of the budget deficit projected for next year will be due to three factors that predated the Obama administration and the 111th Congress.

Which Is Harder: Entitlement Reform or Defeating Hitler?

Now, critics will counter that even if those three items were eliminated, we'd still be left with a projected $266 billion deficit for fiscal 2011. That's not a small sum: Eliminating it would require belt-tightening by federal agencies and, most likely, entitlement reform.

But to say that the United States, over, for example, a 10-year period, can't find $266 billion in spending cuts, entitlement program adjustments, and tax and fee increases, underestimates the ingenuity and resiliency of the American people. This is a nation, after all, that overcame a great internal crisis (the Civil War), defeated the modern world's greatest evil (Adolph Hitler and Nazi Germany), and turned back the greatest threat to human freedom in the post-World War II era (communism).

This may be my own idealism shining through, but compared to those threats, closing a $266 billion budget gap and restoring a healthy economy don't seem like such big problems.

Joseph Lazzaro is writing a book on the U.S. presidency and the U.S. economy.

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America's major corporations are taking advantage of incentives offered by foreign countries to build manufacturing plants there and to hire local citizens for cheap labor. Millions of jobs have been lost to foreign workers and will not return to the USA until corporations are incentivized to do so. America's corporations are hiring in foreign countries but not here. Simple economics: They are building plants where they can get the cheapest labor.

September 08 2010 at 4:49 PM Report abuse rate up rate down Reply

There's no doubt the deficit increased under Bush, but it's increased even more under Obama; and future increases from health care and his other initiatives appear greater yet. Let's not pile on blame but look for constructive action. It may be that the best action is not to play with the numbers but to reform the system to make deficits harder to incur in the first place. Perhaps we should amend the constitution to require super-majorities or even referenda -- in other words an economic bill of rights. This was suggested in the early 90s, and the politicians all ran the other way. Don't let 'em run this time.

September 08 2010 at 12:13 PM Report abuse rate up rate down Reply

Sounds good to me! But then I am a common sense guy and not a financial expert! I do know from reading and listening to various sources that truly represent the truth save for an occasional typo that we have been lied to by the previous administration led by the arch criminals Bush and Cheney! They not only raped the U.S. Treasury but through phony "deregulation" which was really a license to steal legally with the help of the less than (s)upreme Court and the semi-black masrket purchases of defective military equipment at outrageous prices to abet Iraqi war profiteering! Stopping all that corruption alone would go a long way to balancing the budget and reducing the national debt! Roland (Orlando) C. Woodaka

September 08 2010 at 11:37 AM Report abuse rate up rate down Reply

This analysis is fatally flawed. An argument that there will be a decrease in the deficit by letting the Bush tax cuts expire presumes that high dollar taxpayers will not change their earning behavior. They will just work less, hire less, and and invest differently. There should be a small tax on the 50% of Americans who are freeloaders and pay zero federal income tax. The Great Recession did begin in December 2007, but not because of Bush - rather this exactly coincides with the timing of Obama starting to win meaningful primaries and becoming a viable candidate. Employers rightly predicted what was coming. Previously, Bush's unemployment rate was under 5%. Finally, we should let the Iraqi's and Afghans pay for their own wars by employing mercenaries using their wealth of oil and minerals. The USA does not need their military stationed in 90 countries.

September 08 2010 at 11:34 AM Report abuse rate up rate down Reply

As a small business man I can tell you that there are always extra or unexpected expenses. You have to plan for these in your budgeting. I also know that in a down economy you do not raise prices ( read raise taxes). Unlike most businesses I have continued to grow my business and create solid middle class jobs, average $50,000 year. I have recently increased my payroll by 30 to a total of 91. In order to get the financing to do this I invested every bit of cash I had and posted everything else I own as collateral. Now we will struggle to generate enough profit to keep the business going, then at the end of the year just as , hopefully, we will begin to see some daylight the State will take 8.5% of those profits and the Federal government will take 39% for an adjusted total of around 45%. In other words we will lose half of our operating income to taxes. This puts every one of those 91 jobs in jeopardy. If we cannot generate a certain amount of AFTER TAX income then the bank will call those loans and we will go out of business. This is the reality that the so called rich in this country that Obama wants to raise taxes on even more face every day. So, for today I have a business, for today my employees have a job. Tommorow, given the direction the country is now headed with taxes and all the other burdens that are being added, it is in serious doubt.

September 08 2010 at 10:51 AM Report abuse +1 rate up rate down Reply
Hello Bob

As is always the case with government spenders (Democrats and Republicans), the spending of other peoples money is always the solution. The facts are that congress has always been iresponsible with our money, which is why Social Security is at risk rahter than a true rewarding retirement program for all who paid into it.That Ponzi Scheme is the "Crime of the Century". This economy would bounce back quickly if taxes paid in 2009 and 2008 by all households that paid them were refunded now. The money would be deposited in banks, used for the individual households purposes based on their priorities. The consumer would be stabilized and the idiocy of government "targeting" expenditures would alleviate the suffocation now being felt in most households, ie consumers.

September 08 2010 at 10:38 AM Report abuse +1 rate up rate down Reply

Pie in the sky. You cannot bring the troops home with frequent flyer miles. I am really tired of, "It's Bush's fault". Bush did not sign a trillion dollar stimulus package that has done nothing except increase unemployment. Bush did not introduce such uncertainty into the business climate. Bush did not ram thru a "health care" bill that will tax you 3.8% of the selling price of your home when you sell it or exempt muslims from having to buy mandatory health insurance. Bush did not make payoffs to unions by exempting them for years on their gold plated health plans.

September 08 2010 at 10:14 AM Report abuse rate up rate down Reply
1 reply to rnewman514's comment

Remember Dick Cheney: "Deficits don't matter". Athough our problems have been brewing for decades, Bush made our situation much, much worse by starting wars, and borrowing money from the Chinese to fund a tax cut.

September 08 2010 at 10:37 AM Report abuse rate up rate down Reply

Another Washington Dreamer!!!!

September 08 2010 at 9:42 AM Report abuse +2 rate up rate down Reply

I agree that a new tax system would help. But the economy can only survive using my money control factor. It is a well thought out plan that includes provisions for war, disasters, infrastructure, general welfare and many other facets. It needs to be inplemented as soon as it can be understood, but here is not the proper forum. Stay tuned in the following years. The MCF will be real.

September 08 2010 at 7:35 AM Report abuse rate up rate down Reply
1 reply to highman001's comment

Yep, you said it right...CONTROL. This is an out of control government that is sinking free enterprise at an alarming pace.

September 08 2010 at 7:38 AM Report abuse +3 rate up rate down Reply

And joe, how in the hell will keeping the Bush cuts help? This current anti-business moron in the WH is spending more and taking more which leaves the already downtrodden businessman with less. Less = no hires, more layoffs, less spending, worst yet a bad attitude! You must have had the same professor at Harvard Obamma did.

September 08 2010 at 7:30 AM Report abuse +3 rate up rate down Reply
1 reply to ingfp's comment

Oops, I meant doing away with the Bush cuts

September 08 2010 at 7:36 AM Report abuse rate up rate down Reply