Forget the liberation of Iraq, George W. Bush will be remembered as the president who bankrupted America.

Every president of the past 40 years has contributed to the dire fiscal problems from which the United States now suffers. Bush, however, by massively increasing government spending and doing nothing to reduce the looming burden of Social Security and Medicare, will receive more blame than any of his predecessors.

A quick run through the numbers shows why future generations, weighed down by a national debt that is now growing at $1.8 billion a day, will look back in bewilderment, wondering why Bush, despite Republican majorities in both houses of Congress, decided to go for broke.

Under his administration, the national debt has gone up a stunning 24 percent, to $7 trillion. A chief reason for that increase is that Bush has enthusiastically promoted an explosion in government spending. In 2004, federal government outlays are expected to exceed $2.3 trillion, which is $500 billion more than in 2000. At nearly $500 billion, the budget deficit is close to 4.5 percent of gross domestic product, the sort of ratio usually seen in developing countries that are about to implode. Contrary to the White House’s absurd projections, private economists expect annual deficits of between $400 billion and $600 billion over the next 10 years.According to recent research, it’s not as if budget questions lack urgency. Medicare and Social Security are under-funded to the tune of $43 trillion. Both programs are in need of immediate reform, as Baby Boomers will soon start hitting retirement age. Yet Bush further bloated the Medicare imbalance in December with a new drug plan costing at least $400 billion over 10 years. As for Social Security, Bush made reform of this entitlement program a centerpiece of his election campaign. He even told former Treasury Secretary Paul O’Neill that his Social Security plans were “what got me elected,” according to Ron Suskind’s Price of Loyalty. But, beyond forming a special commission, Bush has done nothing to further restructuring of Social Security, which casts doubt on any promises he makes on this subject in the 2004 re-election campaign.

One shocking aspect of the past three years is that so many prominent conservatives don’t seem to care that Bush has splurged like crazy and added over $1 trillion to the nation’s debt in the process. The Republican Party in Congress, despite an ill-deserved reputation for favoring fiscal discipline, has done nothing to prevent Bush from dragging us into a fiscal morass. Instead, the GOP has participated wholeheartedly in Bush’s LBJ-like largesse. Its swing away from fiscal first principles has been breathtaking. The last big spending bill that went through Congress was so full of pork that the Republicans who voted for it deserve the fate of the Gadarene swine.

Of course, there are plenty of hack conservative pundits out there to argue fervently for Bush’s fiscal policy. They rightly champion the president for enacting tax cuts, but they seem unfazed that his spending will have to be financed by higher taxes if it doesn’t stop now. Bush’s defenders also downplay the seriousness of the budget deficit and claim it was unavoidable after 9/11. Nonsense, of course, but dangerous nonsense nonetheless because it gives the impression that the Right, which has won nearly all the key economic debates of the last 20 years, is fully onboard Bush’s sinking ship.

Some Bush Republicans still pay lip service to the principles of fiscal conservatism but in the same hollow manner that the Soviet leaders spoke of “people’s democracy.” And Bush is expected to throw fiscal conservatives a bone or two in his budget for the fiscal year ending Sept. 30, 2005, set to go to Congress on Feb. 2. The president cannot be trusted, though. He displays no sign that he can stop his fiscal folly. As a result, it may take a brutal intervention by the market to put a stop to spending. To be sure, in an election year no one is in the mood to listen to the complaints of fiscal conservatives demanding spending cuts. But when the markets start beating up on this country, ears will open, and the pro-Bush arguments will wilt.

The main argument advanced in defense of Bush’s fiscal policy is that his budget deficits have been thrust upon him by events like 2001’s terror attacks, the economic slowdown, and the campaigns in Afghanistan and Iraq. But while the budget position was obviously going to worsen after 9/11, Bush has caused it to deteriorate to a point where the deficit is actually a threat to the security of the nation’s economy. If another 9/11-type event were to occur, the economy would be much less resilient than it was in 2001, due in part to the fiscal imbalance.

The nasty truth is that Bush was a reckless spendthrift from the get-go. Many on the Left said that the closeness of the 2000 election result demanded of Bush that he govern from the center. Immediately, he went the extra mile and started ruling like a big-government Democrat, spending billions in the process. One example was Bush’s early desire to pour money into the public-education system, which will only entrench its problems. Since 2001, education spending has surged by over 50 percent to $61 billion. And Bush kept squandering long after it became apparent to everyone outside the administration that deficits were going to deepen. As the libertarian-leaning Cato Institute points out, the $400 billion for Medicare prescription drugs is more than double the sum Bush first requested in his 2002 budget.

Looking at spending unrelated to defense and so-called mandatory outlays like Social Security and Medicare reveals Bush’s inherent need to splurge. This exercise also blows away the attempts of some on the Right to compare Bush’s deficits with Reagan’s. In inflation-adjusted dollars, Bush increased non-defense discretionary spending by 20.8 percent in his first three years, versus a 13.5 percent cut under Reagan’s first three years, according to Cato.

Indeed, Bush’s decision to go for butter as well as guns puts him at odds not only with Reagan, but also Lyndon Johnson, long demonized by the Right for ushering in the welfare era. Johnson made substantial cuts in Great Society spending in order to afford the mounting costs of the Vietnam War. Because Bush has done the opposite, even in the unlikely event that the U.S. manages to cut back defense spending in five years, the government will still have big fiscal problems to deal with.

And the chances of a big reduction in defense spending are slim because this administration will find any excuse to throw money at the defense establishment. In fact, there is an intriguing episode described in the Suskind/O’Neill book that suggests that Bush would have increased defense spending even without 9/11.

In the very first month of the Bush administration, Donald Rumsfeld sent O’Neill a memo that recommended a giant increase in defense spending to deal with what Rumsfeld saw as new threats to America. The defense secretary also bemoaned the effect of President Clinton’s “procurement holiday” on transport and weapons systems, according to O’Neill. To address these needs, Rumsfeld requested that spending be increased by between $255 billion and $842 billion over the next five years. To comprehend the audacity of Rumsfeld’s request, recall that defense spending since 2001, after two wars, has increased by around $150 billion.

Obviously, Rumsfeld may have been putting in large requests as a bargaining tactic, and Suskind does not tell us what happened to his request or what Bush’s reaction to it was. This account makes painfully clear, however, that Rumsfeld had dispensed completely with the idea of a “peace dividend.” And it would be wholly incorrect to argue that Rumsfeld was somehow prescient to request this sort of money before 9/11. His memo does not focus on terrorism but on hostile states that may gain access to weapons of mass destruction. And since many “rogue states” still exist, we can be pretty certain that there will be calls for more money to tackle them.

Many conservative criticisms of Bush’s fiscal policy assume that it was right to fight the war in Iraq. From an antiwar perspective, however, Bush’s ramp-up in defense spending looks positively wicked. Not only were Americans duped into supporting the invasion by misinformation about WMD and Hussein-al-Qaeda links, they have also been made to pay through the nose for it. The U.S. doesn’t have a conscript army, but its taxpayers are legally press-ganged into providing financial support for Bush’s military adventurism.

Domestically, pro-Bush conservatives point to his tax cuts when establishing his free-market credentials. And, to be fair, it is a valid claim. Moreover, the Bush administration was right to avoid the current demand of “fiscally responsible” liberals that the budget be balanced before tax cuts are enacted. The truth is that if they had their way, spending would never be reduced to the balancing point. It was an obvious trap, and Bush was astute to avoid it.

At the same time, it is truly scandalous that the president did not accompany his tax cuts with a serious plan to cut the deficit in the medium term. The absence of such a plan shows that the tax cuts were motivated primarily by politics, not a desire to see people take more control over their money. Along with the tax cuts should have come a commitment to balancing the budget in five years using across-the-board spending cuts. It would be a tough sell, especially as much of the deficit is due to a war that few people would have supported had the government not lied. Such a plan, if it were floated now, would probably lose Bush the next election. But introduced a year ago, it could have been a runner and paid off huge political dividends if implemented.

The final argument advanced by the supporters of Bush’s fiscal policy is that the deficit won’t harm the economy by pushing up interest rates. That is very misleading, and to see it being used is a sign of how low pro-Bush economists will stoop. The standard argument for why deficits create higher rates is that the government competes for capital, making it scarce and forcing up its price. That, however, implies a fixed supply of credit. Right now, credit is superabundant. Because of lax Federal Reserve policies, getting a loan has never been easier, and debt, private and public, can grow without getting more expensive. Supply meets demand, and the price of debt goes down, not up.

Now, if the Fed were forced to reverse its easy-money stance, interest rates would soar, and the government’s voracious hunger for debt would help drive up the cost of borrowing. In other words, the Bushies are benefiting from the devil-may-care monetary policy of Fed chairman Alan Greenspan, who really should be cast as the hidden villain in the deficit saga because of his integral role in underwriting it.At some point, the markets will have a panic attack over the budget deficit and the gargantuan shortfalls building up in Social Security and Medicare. If the market freaks during Bush’s tenure, it might be the only thing that forces him to quit his insane spending habit. Then again, all evidence suggests that a dip in the economy might make him spend even more. Bush doesn’t know how to stop. Like a credit-card thief, the President of the United States is going on a shopping binge and making other people pay. If history gives Bush a nickname, it will be Deadbeat Dubya.

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Peter Eavis writes a column on stocks and the economy for TheStreet.com.