Debt goes up when income falls and spending goes up.
There’s a lot of talk about the huge growth in the federal debt, but what caused it?
A poor economy
- A poor economy – GDP growth fell to zero the last 4 years.
Lower tax collections
- Lower tax collections – The federal debt grew $5.5 trillion since Bush left office in 2008, but nearly half of that was from lowered tax collections. Look at this table:
Can runaway spending under Obama be blamed?
- Look at the spending categories in the first graph above – when Bush was in office more was spent on defense, social spending, Medicare and Medicaid – across the board, Obama has spent less than Bush in every category shown.
This isn’t a new trend – Republicans have been outspending Democrats for 32 years.
The drop in tax collections tells only half the story. The rest of the debt growth the last 4 years is due to increased federal spending. Republicans spent more than Democrats, so pinning the debt growth on Democratic Presidents is disingenuous.
See for yourself at www.presidentialeconomics.com.
Indicator – Data source – Web link
GDP, Bureau of Economic Analysis, Current-dollar and “real” GDP
Spending figures for the following categories are available at the Bureau of Economic Analysis
Federal Debt, Sec 3, Gov’t Cur Rec’ts & Exp, Table 3.2, Line 46.
Federal Spending, Sec 3, Gov’t Cur Rec’ts & Exp, Table 3.2, Line 20.
US Tax Receipts, Sec 3, Gov’t Cur Rec’ts & Exp, Table 3.2, Line 2.
Social Spending, Sec 3, Table 3.12, Social spending, Line 1.
Government medical spending, Sec 3, Table 3.12, Line 6 – Medicare, plus Line 33 – Medicaid.
Defense Spending, Sec 3, Table 3.9.5, Gov’t Consumption Exp & Gross Invest, Line 11.
Discretionary spending, Sec 3, Table 3.2, Gov’t Cur Rec’ts & Exp, Line 21 – Consumption Expenditures.