Story's in the Numbers, Folks

Angry Bear gives a nice, concise analysis of the budget deficits (has pretty graphs, too!). Snippet:

Tom DeLay says spending is causing the deficit. Is he right? What's really causing the deficit? War? Recession? Spending? Tax Cuts? Some of each? If the latter, how much of each?

To take a quick look at some of these issues, I grabbed data on Federal Revenue, Spending, and GDP from 1992-2004E. First, the Revenue and Spending Numbers. Note that the Bush budgets and tax plans were in effect from roughly 2002 onward (Spending in 2001 was authored by Clinton; Bush's 2001 rebate did cut into what 2001 revenue was under Clinton's budget).

First, in raw numbers (inflation has been modest, so while these are not inflation-adjusted, doing so would only have a minor effect). Under Bush, Federal Spending has skyrocketed. It was $1.86 trillion under Clinton's last budget but 2.01 trillion under Bush's first budget. Under Bush's third budget (authored with a Republican House, Republican Senate, and Republican White House), spending will be $2.27 trillion. That's a 22% increase over Clinton's last year, at most 3-5% of which is due to inflation. Now that's big government. How to pay for all of this?

Certainly not with tax revenue. That's down from $2 trillion in 2001 to $1.8 trillion in 2004. But that must be the fault of the recession, right? Wrong. Here are the GDP numbers:

2000: $9.7 trillion; 2001: $10 trillion; 2002: $10.34 trillion; 2003: $10.76 trillion; 2004E: $11.3 trillion.
So while slow and accompanied by rising unemployment, growth is still positive, meaning the tax base of national income increased. The only mechanism by which terrorism could affect revenue, as opposed to spending, is by reducing GDP, and that just hasn't happened. The only explanation is the Bush Tax Cuts. If we're not paying for the Bush spending now, when do we pay? Later, starting right around when the Baby Boomers retire.

Also read THIS analysis.