Wednesday, June 10, 2009

Whence comes the federal deficit?

Here's a link to a terrific summary by the NY Times economics writer, David Leonhardt, of the makeup of the federal deficit. Your neo-con friends will be impressed as you rattle off the facts that the giant and continuing federal deficit breaks down as follows:
  1. 37 percent is due to the business cycle, so we can look forward to some of that going away when the economy finally turns up again.
  2. 33 percent is largely a creation of George W. Bush (who also can be blamed for the depth of the business cycle) in such legislation as tax cuts.
  3. 20 percent comes from President Obama's continuation of some Bush policies such as the Iraq war and some tax cuts.
  4. 10 percent from new Obama policies, which break down as 7 percent for the stimulus plan and only 3 percent for such proposals as health care, education, energy. etc.
Footnote: The NY Times style is to use two words for health care, unlike quite a few media outlets. I enthusiastically agree.

On second thought, your neo-con pals may not be pleased to see this breakdown.


Luis C. Isaza E said...

Thank you Larry.....Always good information.

Johnny Farias said...

From the state level, we need to support our President's push for health care reform. Every person should be entitled to have "affordable" health care!

Larry Thorson said...

Let's put Johnny Farias to work for us in the state legislature. He's running in 2010 for the open seat in District 112.

George Fulmore said...

I don't find the NY Times article so great. It fails to differentiate between the annual deficit and the total federal deficit. Sean Hannity keeps getting away with saying that Obama has quadrupled the federal debt. That is nuts, but it goes unchallenged. The king of the federal deficit Presidents was George W., for sure. Go to for the history of the debt. Obama's first fiscal year does not really start until October 1, 2009. Before that, it is really the legacy of the George W. budgets. Thus, George W. will have taken us from about $5.5 trillion to more than $12 trillion, which is, by far, the largest increase in the federal debt by any President. Obama inherited a mess. He will have 8 years, hopefully, to make ours a better country. Will the federal debt grow in the process? Probably, but hopefully nothing like the increase brought about by George W., who clearly more than doubled the debt. If Obama were to do that, we would be headed for a total debt of nearly $30 trillion. I don't think so. Someone needs to explain this all better, and someone needs to challenge Sean Hannity's misinformation.

Larry Thorson said...

Excellent suggestion -- to challenge Hannity at every opportunity.