govrevexpend

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THE FEDERAL GOVERNMENT'S
INCOME AND "OUTGO"

We talk about is a lot.
Do we ever actually look at it?
BE SURE TO CHECK OUT ALL THREE GRAPHS BELOW

Here it is month by month going back to October, 1980 and ending in March, 2011.

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

HERE AND FOR THE
FOLLOWING
GRAPHS, CLICK IN
THE GRAPH FOR A
LARGER VERSION.

The revenue (red line) really did jump up above the expenditures near the end of the Clinton term and stayed
there for the first year of Bush II. But revenue started down right about the time that Bush II took office.
There was a recession going on then, and then they passed that huge tax cut. It took the revenue about three
years to bottom out, and the recession didn't last nearly that long, so I think it was mostly the tax cut.

Expenditures didn't bend up much from the Clinton trend. Even though there were two wars and a Medicare
prescription drug plan, they didn't affect the deficit as much as the loss of revenue.

Notice that revenue started down several months before Obama took office and didn't start back up until a
year after he took over. And the revenue really took a plunge, too! That is what recessions do, and this one
is being called the "Great Recession". It was clearly going on before the election.

Spending went up when Obama took over, too. However if you look closely, you will see that it started the
upward bend before he took over. That was when they started to bail out the banks. The spending continued to
rise with the stimulus spending. Although that spending started to wind down, there was that big omnibus deal
during the lame duck session. I think the next rise in spending near the beginning of 2011 had something to do
with that, although probably not only that.

One more thing about that spending: Even if you think the stimulus spending did no good, it is still clear that
it was intended to keep the recession from becoming a deep depression. There is no way that stimulus
spending would have been enacted without the recession. It was a product of the Great Recession that was
well under way when Obama took office.

SO HOW ABOUT THE DEPARTURES FROM PREVIOUS TRENDS DURING OBAMA'S TERM?

HERE IS THE DEPARTURE FROM THE REVENUE TREND.

The revenue was actually on the way back up before the Great Recession killed it. So if we allow the
recession to continue to fade away, and if we allow revenue to bounce back, then exactly why will it be so
hard to balance the budget?

By the way, this recession is NOT over for the numerous unemployed no matter wnat the official measures
of economists say.

OK, SO HOW FAR ABOVE THE PREVIOUS SPENDING TRENDS ARE WE?

From this, it seems pretty clear to me that the departure from the previous spending trend is much smaller
than the problems caused by loss of revenue. This revenue loss was not from a tax cut; it was the loss of
taxes due to the crashing economy. Without the recession, the federal budget probably would have been
balanced last year (2010). So I still wonder. If we let the recession coast to an end and allow most of the
stimulus spending to expire with it, why is it so hard to balance the federal budget?

To put it another way: Why exactly does budget balancing require that we gut Medicare and Medicaid?

NOTE
$ NUMBERS ARE
ACTUALLY IN
MILLIONS OF $