How the Government Lost $2 Trillion in a Mere Decade

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

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People will vote for a particular party not because of the facts, but just because they belong to that particular group. I remember watching interviews with people in Texas on what they though of Bush and you hear responces like "Well, he's a Texan so I'll have to support him for that".

Goes both ways, rep or dem. I think Barak is doing alright so far with whats going on, he seems like the type that if he causes a mess, he will clean it up. Then again, who knows how things will turn out, some anticipate failure, others anticipate success. I say that if you expect to know what the result it, either way is wrong.

“The great mistake is to anticipate the outcome of the engagement; you ought not to be thinking of whether it ends in victory or in defeat. Let nature take its course, and your tools will strike at the right moment..”

-- Bruce Lee
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Really, required? *That's* what you find objectionable about Bush's policies? I think I would have gone with the strengthening of the surveillance state and the widespread loss of civil liberties in the name of homeland security. Or, you know, the unnecessary/unconstitutional war manufactured out of inaccurate data that played on the xenophobia of an already terrorized populace. His policies regarding the EPA and the FDA come in at a close 50th for me. The FDA, speaking of which, hardly comes out of the whole economic debacle looking attractive, since its monopoly on drug approval is one of the bigger reasons why medical costs are so high in this country and why part of the stimulus money had to immediately go into paying down some of our health care programs. Compared to invading foreign countries, murdering innocent civilians in bombing runs, water torture, and warrantless wiretapping, trimming back the FDA to combat rising health care costs seems like silly thing to attack.
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The Bush administration did so much bad. It's beyond bizarre that he still has supporters. It's disgusting. People died because he drastically weakened very important aspects of our Government such as our FDA and EPA. His administration was in every sense the worst.
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It’s hard to tell if that is sarcasm or serious.

Please clear that up for us JMM."

I'm pretty sure the wink was when he capitalized Obama's pronoun, but I might be wrong. If I'm not, then may Obama help us. ;P
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