What's Behind the Deficit?

[markbark]

What's Really Behind that $1.3 trillon deficit?

From the article (Justin Fox of Reuter's):

In my no-financial-crisis, no-bailout, no-recession, no-stimulus scenario, spending kept growing at 6.22% a year, and revenue kept growing at 3.45%. You can see from the difference between the two numbers that this was an unsustainable path. But it clearly could have been sustained for a few more years.

Where would it have left us in fiscal 2010? With $2.843 trillion in federal revenue and $3.270 trillion in spending, leaving a deficit of $427 billion. The actual revenue and spending totals for 2010 were $2.162 trillion and $3.456 trillion. So spending was $186 billion higher than if we’d stuck to the trend, and revenue was $681 billion lower. In other words, the giant deficit is mainly the result of the collapse in tax receipts brought on by the recession, not the increase in spending. Nice to know, huh?

[WCGreen]

1. they tanked it to cut out the social safety net...

[notesdev]

2. Even without the depression

spending was unsustainable. The depression just brought the fiscal crisis a few years ahead of where it could have been.

All you need is 8th grade math to understand that 6.22% yearly increases in spending vs. 3.45% increases in revenue guarantees bankruptcy, the only question is when.

If you doubt it, try it at home.

[bemildred]

3. Insufficient tax revenue, that's the problem, and too much pissed away on "defense" and "security".