When Bill Clinton so famously “balanced the budget” with the Internet boom and all the taxes from those stock sales, the GOP and Newt Gingrich passed a budget (yes, Congress used to do that) of $1.7 trillion in expenditures. Adjusted for inflation, our federal government would be spending $2.3 trillion today and collecting $2.5 trillion in “revenues,” resulting in a $200 billion surplus. But instead of increasing government spending in line with normal inflation, under Bush and Obama we are spending $3.8 trillion today. Democrats, who believe we have a “revenue” problem instead of a “spending” problem, must also think they have a bartender problem, not a drinking problem.
Hart also slags Republicans, who continue to push for more military spending despite the grim fact that we are already spending close to half the planet’s dollars on that score.
Do you need another indicator that spending – and not simply tax receipts weakened by a bad economy and carve-outs for the top 2 percent of earners – is the root cause of the federal deficit? Then take a look at this chart:
It’s understandable why government spending trends separate from revenue during recessions. At the same time that more people are out of work and receipts go down, demand for various welfare programs (unemployment, food stamps, etc) increases.