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Let's start with a quick definition. A deficit is how much more the government spends in
a year than it makes.
If the government makes 2 trillion, but spends 3 trillion, then it's left with a 1 trillion
deficit.
For many decades, the government has had a deficit almost every year. However, there
was actually a surplus from 1998 through 2001.
Let's focus on the last decade.
You may be wondering why there's such a jump in 2008.
Well, the economy ran into trouble. The housing bubble collapsed, there was a banking crisis,
and so on. So, the government started implementing some emergency measures.
For example, Bush passed the 2008 stimulus and the rescue of Fannie Mae and Freddy Mac.
Now, let's take a look at 2009. So, what the heck happened?
The economy was still in a lot of trouble and needed help, so the government passed
a massive one-time stimulus.
Because the budget for 2009 is passed in 2008, some argue that it should be attributed to
the Bush administration. However, we should note that the stimulus was written and passed
by a Democratic Congress, supported by President Obama, put into effect after Obama took office,
and Obama has even touted the stimulus as one of his accomplishments. So, the stimulus
is generally attributed to Democrats and Obama.
Now, if the stimulus was a one-time fix to help the economy, and since Obama promised
to reduce the deficit, you might expect the next three years to continue without the
same deficit levels. With a 1 trillion dollar stimulus off the books, keeping the deficit
in check should be much easier. Let's see what actually happened.
Holy moley.
You can't blame it on the stimulus. Obama somehow managed four straight years of deficits
well over 1 trillion dollars. He blames the wars, tax cuts, the Medicare prescription
plan. But, all of those were factors during most of Bush's time in office.
There's no possible excuse for this level of uncontrolled spending. It's pure insanity.
Finally, let's take a look at the debt level over the past 30 years.
“As Americans, should we be scared that we owe that kind of money?”
“We don’t have to worry about it short-term.”