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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 Links) http://www.fms.treas.gov/mts/index.html |
| 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 presidency. |
I did not realize this until I saw THIS FORBES ARTICLE which quoted a MARKETWATCH ARTICLE saying that
Obama's spending increases are lower than those of previous presidents. I had heard the opposite so often
that I was skeptical until I updated these graphs and had a look at them.
There has been dissent from that view. Some of it is in this HERITAGE FOUNDATION article and more can
be found in this AP ARTICLE.
Here is a ROLLING STONE article with another comparison of critics vs people who contend that Obama's
increases were very low. It mostly sides with the low spending increase claims.
For one thing, the Forbes and Marketwatch articles did not attribute the first 8 months of 2009 spending to
Obama since the country was still on the final Bush II budget at the time. But that leads to some confusing
difficulty in attributing the various bank bailouts (TARP) and stimulus bills. Some of that was Bush and some
was Obama. So OK, those first 8 points to the right of the blue Obama line are there in any case. Attribute
them any way you want. The spending still flattened out.
Critics also point out that congress has a hand in spending. Again, OK. Congress and the President always
cooperate -- well, scratch and claw, or something -- on the budget. Still, where is the big spending increase?
The AP article has some other criticisms of spending involving Fannie Mae and Freddie Mac, those mysterious
dens of banking witchcraft that, as far as I know, nobody this side of Neptune understands. It worried about
how this and other banking and stimulus spending is distributed through the months and years. I don't think it
affects the general points I am making here, though. See the footnote at the end.**
There is one criticism that may be valid. The banks repaid $110 billion of TARP money in 2010, and that
seems to have been counted as a negative expenditure. I don't know why, but I am aware that accountants do
that sometimes. In my experience as a treasurer of a couple of organizations, I have been told to do that
myself a couple of times. However, it does make the expenditures seem smaller that they "really" are. So I
just added the $110 billion back into the 2010 figures in the graph evenly distributed at $9167 million each
month. That is what the title of the graph is talking about, and it made each month's outlay in 2010 rise by
just a little (see the graph below). The spending still flattened out.
So, anyway, here is the "bottom line". I still don't know what they are talking
about when they claim that Obama is guilty of "runaway spending".
Obama's spending increases are lower than those of previous presidents. I had heard the opposite so often
that I was skeptical until I updated these graphs and had a look at them.
There has been dissent from that view. Some of it is in this HERITAGE FOUNDATION article and more can
be found in this AP ARTICLE.
Here is a ROLLING STONE article with another comparison of critics vs people who contend that Obama's
increases were very low. It mostly sides with the low spending increase claims.
For one thing, the Forbes and Marketwatch articles did not attribute the first 8 months of 2009 spending to
Obama since the country was still on the final Bush II budget at the time. But that leads to some confusing
difficulty in attributing the various bank bailouts (TARP) and stimulus bills. Some of that was Bush and some
was Obama. So OK, those first 8 points to the right of the blue Obama line are there in any case. Attribute
them any way you want. The spending still flattened out.
Critics also point out that congress has a hand in spending. Again, OK. Congress and the President always
cooperate -- well, scratch and claw, or something -- on the budget. Still, where is the big spending increase?
The AP article has some other criticisms of spending involving Fannie Mae and Freddie Mac, those mysterious
dens of banking witchcraft that, as far as I know, nobody this side of Neptune understands. It worried about
how this and other banking and stimulus spending is distributed through the months and years. I don't think it
affects the general points I am making here, though. See the footnote at the end.**
There is one criticism that may be valid. The banks repaid $110 billion of TARP money in 2010, and that
seems to have been counted as a negative expenditure. I don't know why, but I am aware that accountants do
that sometimes. In my experience as a treasurer of a couple of organizations, I have been told to do that
myself a couple of times. However, it does make the expenditures seem smaller that they "really" are. So I
just added the $110 billion back into the 2010 figures in the graph evenly distributed at $9167 million each
month. That is what the title of the graph is talking about, and it made each month's outlay in 2010 rise by
just a little (see the graph below). The spending still flattened out.
So, anyway, here is the "bottom line". I still don't know what they are talking
about when they claim that Obama is guilty of "runaway spending".
| 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 revenue, too. 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 again. 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 work? 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) |
**FOOTNOTE
The AP article has a lot of criticism involving the year in which you put the various bank programs. The
Feds spent $96 billion in 2009 taking over Fannie Mae and Freddie Mac and only $40 billion for that
purpose in 2010. The AP makes an issue about whether this is a cut or not, but it doesn't much matter
to what I am saying. Those numbers should be in the spending reports from the Treasury Department,
so they are in my graphs. The graphs flatten out anyway.
The AP article has some issues with the month & year in which other stimulus and bank spending is
placed. I think it was saying that, if you take a lot of this spending out of 2009 and put it in later years,
then the spending slopes up for a longer time. (Actually the remedy to the problem it was worrying
about did not seem very clear, but I think it wanted that spending spread out over more time.) I tried
spreading them out more equally throughout the 2009 - 2012 period instead of putting most of them in
2009. It does depress 2009 and makes 2010 slope up a little - not much - and thus makes the upslope
in spending last a little longer. But it still flattened out in 2011, and my comments about the real
spending recently meeting the trend from the Bush years still work. The total spending is still the
same. So I think this criticism only matters if you are arguing about precise percent increases each
year rather than just a general flattening trend, which shows up a little later but is still there. That
flattening trend is what I am talking about.
The AP article has a lot of criticism involving the year in which you put the various bank programs. The
Feds spent $96 billion in 2009 taking over Fannie Mae and Freddie Mac and only $40 billion for that
purpose in 2010. The AP makes an issue about whether this is a cut or not, but it doesn't much matter
to what I am saying. Those numbers should be in the spending reports from the Treasury Department,
so they are in my graphs. The graphs flatten out anyway.
The AP article has some issues with the month & year in which other stimulus and bank spending is
placed. I think it was saying that, if you take a lot of this spending out of 2009 and put it in later years,
then the spending slopes up for a longer time. (Actually the remedy to the problem it was worrying
about did not seem very clear, but I think it wanted that spending spread out over more time.) I tried
spreading them out more equally throughout the 2009 - 2012 period instead of putting most of them in
2009. It does depress 2009 and makes 2010 slope up a little - not much - and thus makes the upslope
in spending last a little longer. But it still flattened out in 2011, and my comments about the real
spending recently meeting the trend from the Bush years still work. The total spending is still the
same. So I think this criticism only matters if you are arguing about precise percent increases each
year rather than just a general flattening trend, which shows up a little later but is still there. That
flattening trend is what I am talking about.
