Neither Bush Nor Obama Caused Our Deficit Problem - MicRepublicans often blame Obama for the huge deficit. We often hear rhetoric like "Obama has run up more debt in 4 years than Bush did in 8 years." Democrats tend to blame Bush. These arguments are intellectually bankrupt and they reveal a failure to understand basic economics, math, or our system of budgeting.
Obama inherited a $1.3 trillion deficit. The deficit was caused by a combination of three factors:
1. Bush's policy changes
Let's quickly dispense with the impact of the Bush wars, Medicare prescription drug benefit, and tax cuts. None of these things were paid for. The Bush tax cuts cost $160 billion per year, the prescription drug benefit costs about $80 billion per year, and the Iraq/Afghanistan wars cost about $200 billion per year. That adds up to $440 billion per year in deficit impact.
2. Bush's reaction to the economic collapse.
Bush's 2008 stimulus added well over $100 billion to the yearly deficit (since many of the policies remained in effect). It added more than $200 billion to the 2008 deficit, but let's leave that aside for now. Bush's financial rescue efforts (the bailouts) added up to about $130 billion per year in deficit impacts. When you add all of that up, you get a total of $230 billion.
All told, Bush's policies created about $670 of the $1.3 trillion deficit that Obama inherited. I'm not here to throw stones at Bush. I supported some of those policies!
3. The economic downturn
In 2009, economists estimated that the economic downturn increased the deficit by about $426 billion in 2009. This assumption is based on two factors: (1) the loss of revenue after an economic collapse and (2) an increase in automatic payments as more people are forced onto unemployment insurance and other forms of government assistance.That adds up to about $1.1 trillion in deficit spending that had nothing to do with Obama. Aside from bailouts (which sharply decreased in impact in 2010 and beyond), these impacts were unchanging.