Who's Responsible For The Explosion In Government Spending and the Massive Deficit?

The Republican Party (mostly).  But like all loud-mouthed bullies, they take no responsibility for the economic mess this country is in.  Their hero, Ronald Reagan didn't pay any mind to deficits, and he raised taxes when the country needed them.  The current GOP, as David Brooks stated, however, is an ABNORMAL political party.  Their leaders promised to  address the jobs situation as soon as they took over the House.  Instead, they went after Planned Parenthood and NPR.  They did not introduce one piece of legislation for improving the jobs crisis.

Remember that fact when you read the howling bloggers on the right who have convenient amnesia on how the GOP burned the house down while playing with matches, then blamed the fire department for not saving it.



Business Insider explains this with charts and facts:

Mention anything about the US's huge debt, deficit, and debt-ceiling problem, and fans of both political teams will immediately begin shouting at each other.

Republicans howl that the whole problem is the fault of President Obama, who exploded federal government spending the moment he took office.

Democrats, meanwhile, blame massive increase in federal government spending during the Bush years and the triumphant assertions by Republicans during those years that "deficits don't matter."

So, what's the truth?

They're both right. (And wrong. And, on the Republican side, hypocritical.)

Federal government spending has risen under President Obama, mostly because of the $800 billion stimulus designed to offset the massive recession he inherited from President Bush. But the increase in federal spending under Obama is dwarfed by the colossal increase under President Bush.

And about that deficit:

The Truth About Who's Responsible For Our Massive Budget Deficit

Say the words "budget deficit," and Republicans and Democrats begin screaming at each other about who's to blame.

Republicans howl that the deficit is President Obama's fault, because he has exploded government spending and failed to fix the economy.

Democrats roar that President Obama inherited a catastrophic economic mess, that this mess will take time to clean up, and that our massive deficit is therefore President Bush's fault.

So, who's right?

Let's start by looking at the deficits under Presidents Bush and Obama. Then we'll figure out what has caused them. Finally, we'll assign some blame.

First, the chart below [go to link for the chart] shows the progress of the annual deficits under Presidents Bush and Obama.

President Bush, you will recall, inherited a budget surplus (the first in decades). Then, hit with a recession, he took the budget into deficit. Then he cut taxes, growing the deficit to $400 billion a year. Then, the economy boomed between 2005 and 2008, reducing the deficit to $200 billion a year. Then, the financial crisis hit, and the Bush deficit ballooned to $400 billion again
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In early 2009, President Obama took over, amid the worst recession since the Great Depression. President Obama signed an $800 billion spending increase at the same time that GDP and tax collections tanked. The combination of these two factors--growth in spending and a drop in revenue--exploded the deficit to $1.4 trillion. In 2010, the economy and tax collections improved modestly, and the deficit shrank to $1.3 trillion annualized.
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Republicans howl that President Obama has exploded the size of federal government spending in his short tenure as President, and it is true that he has increased it. But President Bush actually increased federal spending by more than 2X as much as Obama has. So it is unfair to lay the explosion in spending at the feet of President Obama: Both presidents are responsible.

The increase in government spending, meanwhile, is actually NOT the only factor that has caused the deficit. The other factor--equally if not more important--is the fall-off in government revenue (tax receipts).

This second and larger factor can be blamed on two things: First, the Bush tax cuts, which reduced revenue, and, second, the weak economy, which has reduced the incomes and capital gains upon which most federal taxes are based.

In the chart below [link to chart here.], you can see what happened to both federal receipts (red line) and spending (blue line) over the past decade.

President Bush cut taxes in 2001 and 2003. These tax cuts hit federal revenue, while federal spending growth continued apace. This combination ballooned the deficit in the early years of the Bush presidency.

By the middle years of the Bush presidency, however, on the strength of the housing boom and strong economic growth (much of which now looks like a debt-fueled mirage), federal revenues began to grow rapidly. By 2007, in fact, the gap had almost closed.
But then the bottom fell out. The housing bubble burst, the financial crisis hit, and the economy plunged into recession. And then President Bush handed President Obama the worst recession in more than 70 years and left Obama to clean up the mess.

This recession clobbered federal revenues (tax receipts--red line), which still have not regained their 2007 bubble highs. President Obama's stimulus, meanwhile, helped add about $600 billion to federal spending (blue line). The combination of these two factors ballooned the deficit from $400 billion when President Bush left office to ~$1.3 trillion now.