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Twelve Years Ago We Had No Deficit and No iPods

Twelve Years Ago We Had No Deficit and No IPods.

By Gretchen Hamel

As seen in POLITICO’S Arena

Upon hearing the Treasury Department’s announcement of another deficit for the month of November and its projection that we’re on track for our fifth straight year of a trillion dollar budget deficit, I took a trip down memory lane. …

It’s hard enough to believe it’s been four years since Washington passed a budget, and harder still to comprehend that that the last budget surplus was eleven years ago. …

So the last time there was a surplus, a morning jog while listening to Justin Bieber on an iPod was impossible. …

Many often use the 2001 budget surplus as a political tool to call for higher taxes. … But what everyone overlooks is how much less we were spending in 2001 compared to now.

In fiscal year 2012 we took in $2.45 trillion in tax revenue, compared to $2.6 trillion we brought in fiscal year 2001, after adjusting for inflation. However, if you look at spending, you can see where the problem lies. We spent $2.43 trillion in 2001 (adjusted for inflation) and spent an unreal $3.5 trillion last year.

As our tax revenue has remained fairly steady when counting inflation, the spending is out of control. …

As the fiscal cliff negotiations continue … we know some things to be certain: Leaders on both sides have acknowledged spending cuts must be tackled. …

But is it fair to put forth a plan that demands Clinton-era tax rates without Clinton-era spending?

Had spending remained the same as in 2001, with current tax rates, we would still have a surplus. Instead we have had four straight years of trillion dollar deficits.

Click here to read the op-ed.

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