www.heritage.org
Since 1965, the government has operated at a deficit for almost the entire 33 year period. The only exception was the period immediately following the 1994 Republican Revolution in Congress. It was during this period that Bill Clinton famously declared "the era of big government is over."
1994 was the first time the Republicans held a majority in Congress since 1972 (roughly the last time government spending came close to matching revenues). The Gingrich Congress was able to control the rate of spending relative to revenues, and a surplus resulted.
Unfortunately, three things happened starting in 2000 that caused the surpluses to disappear:
The dot-bomb recession started in April of 2000, causing a drop in GDP and government revenues. Bush responded appropriately by pushing his first tax cut in 2001 to fix the economy. Before these tax cuts could take hold in 2001, 9/11 happened.
The attacks on 9/11 cratered the economy, further reducing government revenues. The US responded appropriately in kind around the world. As in all times of war, military spending increased, but in this case there was no corresponding drop in domestic spending to offset the costs.
George Bush and the Republicans in Congress forgot they were supposed to be the party of small government. The budget in 2001 included spending increases of 42%. The Republicans spent like drunken sailors on programs such as Medicare Drug Benefits and No Child Left Behind. These massive new spending and entitlement programs bloated government spending.
After 2001, spending spiked up and revenues fell. The results of these three things caused federal deficits starting in 2002. By the time the tax cuts of 2003 went into effect, we already had deficit spending. Even so, 3 years later, tax revenues were back to their pre-recession pre-9/11 year 2000 levels. Four years after the Bush tax cuts, federal revenues had risen from their 2000 levels by $144 billion dollars. That's right, revenues went up AFTER the tax cuts. Unfortunately over the same period, spending increased by $589 billion PER YEAR.
www.heritage.org
The War in Iraq cost us 139B...but we INCREASED spending by $589 B...so it was NOT the war that caused the massive deficits.
Notice on the chart the rapid increase in spending over the last 2 years....had spending been kept the same level we would be at a surplus even today (without the bailout money that has not yet been spent)
There has been across the board spending increases. Community development increased 29% last year, Transportation by 8.1%, State Department by 15.4%.
The fact is that were we had a situation where the Republicans used to be counted on to lower the spending increases (not acutally LOWER spending ..just not increase it as much) which acted as a brake against the Democratic congresses and the deficits...we had a situation where the republicans spent and now the democrats are trying to out do them.
Like pigs at the trough, every bureaucracy expands every year, and no program ever solves the program it was created to solve.
It is time we started a 3rd party, one without Lawyers, Eastern elitist - just common folk - that is the only way this will get under control
