Where the Budget Deficit Actually Came From(good article to see coming collapse of our lifestyle)

american thinker ^ | 4/20/11 | g richards

[bestintxas]

I found that in thinking about the budget, I did not have a good mental picture of where, exactly, and when, exactly, things had gotten out of line. So I decided to do a quick analysis of the "big pieces" of the federal budget just to get a feel for the magnitude of our financial problems and where in the budget they were located. It occurred to me that others might be interested in this as well, and that thought is the provenance of this essay.

Just to begin at the beginning, this chart is a "50,000 foot view" of the battlefield. This is a chart of GDP at the top and federal budget expenditures at the bottom.

(see chart)

The orange vertical line is at 2008, the end of the Bush (43) Administration. All the numbers and all the charts in this essay are in current dollars. That means that they are in dollars not adjusted for inflation. The growth rate of GDP that one typically hears -- 4% or 3% or 2.5% -- is a real rate that has been adjusted for inflation. But since the budget in any year concerns dollars for that year, there is no point in adjusting a historic study like this for inflation. Inflation is a different issue and is not important here because everything -- receipts, GDP, expenditures -- are in dollars of the same year and thus of the same value for that year.

This issue comes up right away in the above chart.. You might ask, "Where are the recessions?" in the GDP data. The reason you don't see them is that in current dollar terms they are very small -- they are significant in real

[businessprofessor]

“$ 55 Billion is chump change.”

I agree that $55 billion is a rather small part of the budget picture. However, $55 billion represents a very large problem because SS was supposed to run a surplus until 2017. In addition, SS expenditures have been moderated for several years due to no COLA. SS expenditures will soon become a major driver of government spending especially as inflation accelerates. SS and federal pension COLAs will explode spending in these two areas.

My head is exploding over the enormous amount of government spending. I just wish that the majority would see the light.

[mmercier]

Ping for later...?

This piece is such a detailed analysis that it will take a week with no sleep, and straight out rereading, to absorb and understand.

[Sergio]

Bookmark.

[Texas resident]

Actually very easy to understand.

Quote from a business radio show. Paraphrased.

“When your expenses outstrip your income, your upkeep becomes your downfall.”

[Beowulf9]

“piece is such a detailed analysis that it will take a week with no sleep, and straight out rereading, to absorb and understand.”

I did read some of it, got a headache, but was interested in the fact that it points to Obama as the point of entry when the debt became heightened to unmanageable, as some out there are saying Bush caused the deficit...no surprise. Want to go over it more thoroughly at my leisure, in between headaches from it, of course;)