Image: New York Times analysis of Congressional Budget Office data
Imagine you're the world's biggest shopaholic - say, you spend $1,000 a second. Who'd spend more in a decade: you or the government? If you do the math, you'd only spend $0.3 trillion. The government has got you beat by a long margin.
David Leonhardt of The New York Times has an analysis of how the US Government managed to turn a projected $800 billion budget surplus into a $1.2 trillion deficit - a swing of $2 trillion - in a mere decade:
You can think of that roughly $2 trillion swing as coming from four broad categories: the business cycle, President George W. Bush’s policies, policies from the Bush years that are scheduled to expire but that Mr. Obama has chosen to extend, and new policies proposed by Mr. Obama.
The first category — the business cycle — accounts for 37 percent of the $2 trillion swing. It’s a reflection of the fact that both the 2001 recession and the current one reduced tax revenue, required more spending on safety-net programs and changed economists’ assumptions about how much in taxes the government would collect in future years.
About 33 percent of the swing stems from new legislation signed by Mr. Bush. That legislation, like his tax cuts and the Medicare prescription drug benefit, not only continue to cost the government but have also increased interest payments on the national debt.
Mr. Obama’s main contribution to the deficit is his extension of several Bush policies, like the Iraq war and tax cuts for households making less than $250,000. Such policies — together with the Wall Street bailout, which was signed by Mr. Bush and supported by Mr. Obama — account for 20 percent of the swing.
About 7 percent comes from the stimulus bill that Mr. Obama signed in February. And only 3 percent comes from Mr. Obama’s agenda on health care, education, energy and other areas.
Previously on Neatorama: The $700 Billion T-Shirt