Facts Behind Current U.S. Deficit

You know how it works, in one hand you have your checkbook showing your last deposit and in the other hand a stack of bills. You see the advertisement on TV showing just how many empty water bottles it takes to circle the earth and you wonder how many bills it would take to do the same. For most of us it’s a never-ending battle, the balance in the checkbook just simply doesn’t go far enough to cover bills, plus everyday expenses.

The country is in the same situation; we put money in the bank from receipts then pay it out on expenses [outlays]. If there’s any left over, it’s a surplus and if we don’t have enough it’s a deficit. A deficit is similar to an overdraft by spending money you don’t have. The difference between us and the U.S. is the United States has an obligation to pay certain items whether or not there is money in the kitty.

In the past 10-year period there have only been two years that the federal government did not show a deficit. In 2000 we had a surplus of $236 billion dollars, which is the last year President Clinton was in office and the following year we had a surplus of $128 billion, more than likely a carryover from the Clinton policies.

So, we know where we’re at, but how did we really get there? The Republicans would have us believe President Obama’s economic policies have put us so far in debt we’ll never see the light of day, but that’s simply not what happened.

Think about something for a minute, “Obamacare” was signed into law in March of 2010, yet the economy will not see the full extent of the legislative changes for our new health care policy for many years to come. Is this an exception to the rule? No, most major legislation does not immediately go into effect; therefore it will have an impact over many years.

A review of the above chart will indicate, with the exception of 2001, the U.S. had a deficit every year President Bush was in office. The legislative changes put into effect under his administration did not immediately cease the minute he left 1600 Pennsylvania Avenue; the policies signed into law under Bush remain in effect until legislation is passed to change.

The following table lists legislative changes from 2001 through 2009 and the effect the legislation had on the deficit. For fiscal year 2009, this prior legislation created a deficit of $1.361 or $1.4 trillion dollars (rounded).

So, simply put the $1.4 trillion dollar deficit shown in the above chart for 2009 cannot be blamed on President Obama, since only $458 billion was due to legislation signed into law during his first year in office. The balance of the deficit – $903 billion – is left over from the Bush administration.

See https://articlesandanswers2011.wordpress.com/2010/07/20/deficit-chart/ for legislative changes by fiscal year.

Year Legislation

Impact on

FY 2009 Deficit
2001 Legislation -241
2002 Legislation -121
2003 Legislation -189
2004 Legislation -128
2005 Legislation 3
2006 Legislation -92
2007 Legislation -32
2008 Legislation -103
2009 Legislation -458
Total -1,361
Original data source: Table 4. Budgetary Effects of Legislative Changes by Year of Enactment, FY2001-FY2009
This entry was posted in Economy, Government, National Debt, News and politics and tagged , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

One Response to Facts Behind Current U.S. Deficit

  1. Pingback: What is the Debt Subject to Limit? | ARTICLES and ANSWERS 2011

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s