The facts as reported by the Congressional Budget Office (CBO) appear in the table above/right (the table is from this WSJ opinion piece).
During the last four years tax revenue has increased.
Outlays by the government jumped in 2009 (a result of Bush addressing the financial crisis) and have stayed elevated ever since.
The real problem is the bottom line as it were. Under all but the last year of Bush the deficit was a few percent of the GDP. Now in 2008/2009 there was a crisis (which was averted) in the automotive, banking and insurance industries.
But the funds that were spend by the Federal government were largely repaid by 2012.
Yet the deficit and outlays have remained and now represent some 10% of GDP.
(To my knowledge the Senate has not provided a budget in the last several years. These numbers are calculated after the fact and reflect what actually happened.)
Note that this spending is not like spending on, say, a house or other collateralized loan obligation where there was some asset to back up the borrowing. No, this is like borrowing 10% of your income each year or month on a credit card.
Now what I find interesting is how these facts are twisted.
A financially illiterate fellow I know posted a link to this Forbes article.
This article in turn references a MarketWatch article here.
On first glance these articles appear to claim that the last four years of spending (including the last one of George Bush) show that the present Administration has been the most frugal in the last fifty or so years.
But a careful reading of the fact shows that this measurement of frugal spending is measured relative to the crisis year of 2008 (and the 2009 federal budget). So you take the crisis year of Bush and then, when you spend a little less (a percent or two) you wildly claim to be the most frugal government spender ever.
During the financial crisis government spent on things like AIG stock, GM and propping up banks hit the federal budget deficit at about 10% of GDP.
But the crisis financially only proceeded on for a year or so.
Today all these funds are being (or have been) paid back. And we don't need to continue outlaying money is if the crisis is not over - but we are.
During the campaign the current Administration claimed to have generated five million new jobs and that things "were getting better" and that it "just needed more time."
But the government spending has not declined even though revenue is increasing.
So only if you consider the current Administration relative to the peak the financial crisis is it actually spending less.
Clearly you could measure the spending of this Administration relative to World War II as well - in which case they would look cheap.
So a good crisis never goes to waste.
In this case the arterial blood of Lady Liberty is pumping out onto the floor unchecked through a severed limb.
But some cry "It's Only a Flesh Wound!"
The current Administration next plans to appeal to the populace for a tax increase (see this).
Revenue is already increasing (even though the financial crisis).
The problem is not that tax revenue is not expanding (its in fact expanding faster than the economy is growing).
The problem is that the spending is remaining at crisis levels without a crisis.
Most money spent has been repaid or is on track to be repaid.
So why are we still spending like we are in a war or crisis?
So the current Administration has fooled people like my friend into believing its the most frugal ever. Mostly by making only clever relative arguments that focus on the fact that no one thinks about history any more - even history only a few years old.
My friend owns a business so I would have hoped he wasn't that financially ignorant.
But I guess I am wrong...
The reporting elsewhere, MarketWatch and Forbes, are simply what's called spin. Spin relies on ignorance of the facts to change or maintain your way of thinking.
It relies on the reader not bothering (or being too ignorant) to check the facts.
The only firewall left between US and Greece is now the US Congress. US debt is compounding at 10% per year while interest rates are at effectively zero percent (0%).
This means that financing these astronomical deficits is cheap.
But the Administration is doing this with short term (two year notes).
Eventually the notes will have to be refinanced at much higher rates. (Like borrowing 10% of your salary each month or year on "0%" credit cards only to find that in four or more years down the road the "rate" jumps up to a more realistic rate (anywhere from 5% to 30%).
Oops!
But by then you're out of office and forgotten.
The cliff is coming!
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