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Here’s how federal deficit got so big

Justin Fox SAYS the federal deficit of $1.3 trillion in the fiscal year that just ended “is mainly the result of the collapse in tax receipts brought on by the recession, not the increase in spending.”

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16 Comments

  1. Interesting article and comments that follow. Simply put, the deficit is too large because we have ceded too much power and control to government without market forces being able to control the spend. Both the Democrats and Republicans like bigger government to maintain power. Until we force politicians to uphold their respective oath of office (upholding the Constitution) both government spending and potential deficits will continue to increase.

  2. David Schultz: Your implication that the federal government’s spendthrift ways violate the Constitution is wrong. If that were the case, the courts would have voided many of the laws under which such spending has occurred. After all, the Supreme Court has had a lot of conservative justices over the years, but the court hasn’t negated too many spending bills.

    I’m always amused at people, especially Tea Party types, who presume to know what the Constitution allows and what it doesn’t allow — as if they, not the courts, were the final arbiter of such matters. I’m not saying you’re one of those people, but your comment brings them to mind.

  3. I think David’s point might be that forming and funding massive entitlements has nothing to do with upholding the Constitution. They should stick to what is clearly spelled out and let the rest up to the people. The extra taxing and spending only serves to increase the power of the political class.

  4. Milton Waddams

    Unfortunately, the SCOTUS has interpreted the commerce clause so broadly that the Federal government can spend money on pretty much anything.

  5. The Constitution states that federal powers are delegated, limited and enumerated. There are provisions for Congress to pass spending bills and raise revenue to pay for them. While spending money does not violate the Constitution many of the ways Congress spends money does. Like Madison, the author of the Constitution, I cannot undertake to lay my finger on that Article which allows the taxing of the constituents for the purposes of benevolence. It is my opinion that the general welfare clause has been grossly misinterpreted.

  6. max berry

    “ We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence,[2] promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

    section 8, clause 18:“ The Congress shall have Power – To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

    Ergo, one of the goals of the country is to push for the common good and use whatever proper laws are needed to do so.

  7. David Schultz: Conservatives have been arguing for decades that programs like Social Security and Medicare are unconstitutional, but they’ve never been able to win such arguments in court. In other words, they’re full of crap.

    The courts, not the malcontents, get to decide what’s constitutional and what’s not. That line of authority is established by the Constitution itself.

    By the way, Madison was the so-called father of the Constitution, not the “author” of it. Indeed, he failed to get some of the stuff he wanted when the document was drafted.

  8. shawnnews

    Pat’s right about the righties deciding they are the final authority on the constitution. Remember, many of them want to get rid of entire consititutional amendments.

  9. When the New Deal, specifically, Social Security, was introduced, it was found unconstitutional. In 1937, FDR brought forth the so-called “court-paking” plan which would place and age limit on the Supreme Court justices and possibly change the number of justices. The plan failed the Senate 70-30. However, two of the justices retired and were replaced with justices favorable to FDR’s progressive plans.

    To argue that conservatives have never been able to win in court isn’t exactly correct. Moreover, using case law to justify the existence of certain programs or governmental policies can get present a whole host of unintended consequences, Jim Crow laws being the most common illustration. People are not perfect and that is why the Constitution makes it so difficult to make changes.

    Yes, the courts ultimately get to decide. There was a ruling recently about corporations giving money to political campaigns that was fraught with much controversy. That doesn’t necessarily make it right.

    Madison wrote a majority of the Constitution, which is why I characterized him as the author. I tend to avoid patriarchal phrases, like Father, so as to avoid the phrase becoming the argument. There were a number of items that are included in the Articles that did not make it into the Constitution. That said, it was pretty clear the authors wanted to limit the power of the federal government.

    I am curious about how many “righties” want to get rid of entire constitutional amendments. I will concede there are some than need further examination as to intent, but I certainly wouldn’t want anyone to make carte blanche changes. These types of changes generally lead to further erosion of freedom and liberties, which are of paramount importance to everyone.

  10. Craig Knauss

    That’s right, Terry, George W. Bush didn’t have any deficits. That’s why he inherited a $5.807T debt and handed Obama a $11.910T debt (source Treasury Dept.). GWB’s FY2008 deficit was about $400B. And his FY2009 deficit was about $1,400B. (And that was with his two wars essentially off the books.) Obama’s first full fiscal year deficit (FY2010) is about $125B less than GWB’s last budget which ended Sept. 30, 2009 (source Congressional Budget Office).

    And Terry, the Heritage Foundation is a rightwing “think tank” whose mission is to promote the conservative agenda (any way they know how). Getting the straight scoop from Heritage is like getting reliable information from the KGB (now called the FSS).

    So the next time some flat-lining conservative tells you the deficits are all from Obama’s spending, tell them to try some facts with their misguided opinion.

  11. The deficits are from government spending. A government controlled by the democrats. A government controlled by the democrats that when faced with a fiscal crisis of unprecedented recent level decided to……spend even more of our money.

    I hope they enjoy their last night in control of our fiscal house and I hope the republicans are smart enough to learn from their past mistakes.

  12. Not only that, but as we all know, most of Bush’s final year deficit came from the TARP bill, which is making money for the tax payers. You can’t say that for Obama’s policies.

  13. shawnnews

    That Chrysler bailout helped the company back on its feet and now there is a plant expansion going on in Belvidere. Yes, you can say that Obama’s policies make money for the taxpayers.
    I’m sure all the Republican congressmen and state officials are going to congratulate Chrysler for expanding the Belvidere plant even though the company wouldn’t be able to had it not been for the stimulus.

    http://www.dailykos.com/story/2010/10/28/914483/-Arent-you-glad-we-didnt-let-the-auto-industry-fail

  14. While I agree that the recession played a role in the current large deficit, with a decline in incoming tax revenue and an increase in social safety net spending, I find it interesting that usually the same individuals who articulate this point also castigate Bush for squandering a budget surplus. Many have forgotten that Bush also inherited a mild recession (the dot.com bubble bust), which was further exasperated by the economic aftershocks of the 9/11 attacks. Also, many have forgotten that progress was being made to eliminate the deficit again in the mid-2000s. After reaching its height in 2004 at $413 billion, the Republican Congress left the new incoming Democratic Congress with a $161 billion budget deficit in 2007. Despite Justin Fox’s back-of-the-envelope calculation, the Congressional Budget Office estimated in January 2007 that if present policies continued, the budget deficit would have been $137 billion in 2010, $12 billion in 2011, and a budget surplus of $170 billion in 2012.

  15. Craig Knauss

    Delusional Terry,

    I’m factually challenged?

    I got my debt information from the Treasury Dept. Deal with it.
    I got my deficit information from the Congressional Budget Office. Deal with it.
    I got my unemployment information from the Bureau for Labor Statistics. Deal with it.
    I got my oil price information from the American Petroleum Institute. Deal with it.
    A fiscal year runs from Oct. 1 to Sept. 30, a full year. Exceptions are not made for Inauguration Days. Deal with it.
    The Treasury Dept reports the national debt on Sept 30 for each concluded fiscal year. Deal with it.
    GWB presented his budget and Congress approved and funded it before Obama took office. Deal with it.
    Every outgoing president, including GWB, writes his last budget which carries over to Sept 30th of the next administration. Ford did it. Carter did it. Reagan did it. Bush I did it. Clinton did it. Bush II did it, and Obama will do it. Deal with it.
    Who said the FY2009 deficit is split? You? Provide us with the USC citation that says any budget should be split that way. And please explain why you didn’t do that with Carter’s last budget or Clinton’s last budget.

    No, Terry. I am not entitled to my own facts. That’s why I didn’t present them. I presented official data from the government, etc., which was not taken out of context like you do. Deal with it.

    By the way, Terry, do not assume that you are smarter than me. You don’t have a clue what I do for a living or how long I have been doing it. And it’s extremely doubtful that you could do it.

    Have a nice evening.

  16. Craig definitely gets the award for most defensive poster at this site.

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