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|THE FEDERAL GOVERNMENT'S
INCOME AND OUTLAYS
We talk about it a lot.
Do we ever actually look at it?
BE SURE TO CHECK OUT ALL THE GRAPHS BELOW
|Here it is month by month going back to 1980 and ending in April, 2012
I made the graphs using data from the US Treasury Department.
You can find the data by going to the following site. Take one of the links just below where is says "Quick
|This one does not have that TARP money added into the 2010 figures, which show a bit of a dip here.
|NOTE: NUMBERS IN THE GRAPHS ARE ACTUALLY IN MILLIONS OF $
|Here is the updated version of the whole revenue and expenditure history back to 1980. The Older version of
the graph, which I used to have on this page, is HERE
|NOW THE THING IS ---- When I look at these, I just can't find that explosive increase in
expenditure that so many people say that President Obama is responsible for. In fact the
rate of increase just almost (not quite) vanished when he became president and especially
after his own first budget became operative in September of 2009.
Those blue points represent expenditures each month. Just watch them flatten out under the Obama
|WELL. OK. WHAT DO WE SEE HERE?
It is true that Obama's expenditures are higher than the others even if flattened out. But that is just
because they came later than the others. All presidents have spent at a higher level than previous ones.
The revenue pattern (red dots) is funny. Most months are below average (red line) in revenue. A few
months are way above average. Funny thing -- most of those really big revenue months occur in April.
Revenue is below expenditure throughout most of this. So there have been deficits for a long time, at
least back to the early Reagan days.
But it looks like Clinton did balance the budget, at least for a while. Looking carefully at this, I would say
that Bush I, before Clinton, gets some of the credit for this. Late in his term revenue ticks up a little and
expenditures bend down a little. I imagine that is when he broke the "Read my lips,no new taxes" pledge
-- an action that required his supporters to be scraped off of the ceiling.
But, then, Clinton kept the spending increases low. Also the revenue ticked up again early in his term --
probably the tax increase he pushed through then. That left revenue increasing faster than expenditures,
and look there. In 1998 they met and there was a surplus for a while.
Remember all the forecasts of huge surpluses that were flying around for a while late in Clinton's second
term? You can go back to those days and forecast the same thing. Just below is this graph again with
arrows that continue the revenue and expenditure trends that were going on then, Just look at that
revenue get ahead of the spending! But it never happened.
|SO WHAT REALLY HAPPENED JUST AFTER 2000?
Spending kept going up, as the wars and things kicked in, but the pattern of increase didn't really
change much until the Big Recession late in the Bush II term.
But revenue took a heck of a plunge, biggest plunge up to that point. What happened? Well, there
was a recession, but not too big a recession. Then there were also those famous Bush tax cuts that
we (as of this writing) are still arguing about whether to reverse.
It looks to me like those tax cuts had quite an effect in creating a largest deficits up to that time.
Look at that red line plunge between 2001 and 2003!
But the revenue started to grow again, and it looks like revenue was on track to meet expenditures
sometime around 2010, sort of like during the Clinton years. Here is another copy of that graph with
arrows representing the trends of the mid-Bush II years. The arrows do meet. If we could have
continued the trends, the budget would have been balanced again.
But it never happened.
|SO WHAT DID HAPPEN?
A bunch of Wall Street banks went to pot, the big recession hit, and revenues went down through the
floor, through the basement, and through several sub-basements (double black arrow). Recessions do
that and big recessions really do that. Things like income that are taxed by the government go way
down, so the tax receipts go down too.
Also making the revenue go down -- The famous stimulus was about a third tax cuts. That hurts
The revenue went down far below the previous trend.
It even went far below its actual high point -- almost a full division on the graph vs.a half division in
the early Bush years.
Spending went up, too. There were Bailouts, TARPS, stimuli, Freddies, and such. In fact it went
almost three quarters of a division above the previous trend -- briefly. But then it flattened out
That time when the spending rose above the previous trend (mid-2008 through mid-2010 mainly but
continuing a little through early 2012) is probably what kept the Big Recession from being a lot worse.
After all, when you spend money on stuff you have to hire people. When you stop spending, you have
to fire them.
Look at the right end of the graph. Spending is just about back to where it would have been on the
Bush II trend. You know, the trend that would have led to a balanced budget in 2010 if the big
recession had not taken place.
It is the revenue that is way down.
So.........Why do people say that the federal deficit is nothing but a spending problem? The budget
would be balanced with current spending if the revenue had not plunged. (That red revenue trend arrow
meets the actual blue spending line, too.)
And suppose that we did cut spending enough to make revenue and spending meet? That would be two
divisions on the graph -- per month (look at the right end of the graph). That is 100 thousand million
dollars a month -- 100 billion dollars a month -- a third of the way to zero spending. That is an
annual rate of 1.2 trillion dollars being cut.
Yeah, let's lay off a third of the government work force and a third of the private contractors that
serve the government. How, exactly, does that help the unemployment situation and put people to
Oh, and if we had that Constitutional amendment requiring a balanced budget, we would have had to
"unemploy" all those people too. Unless we could get 2/3 of congress to override the amendment.
(ha ha ha)