- What is a budget deficit? "The federal government collects taxes, fees, and other revenues each year while spending on programs and operations. A deficit occurs when total expenditures in a given fiscal year exceed total revenues. When this happens, the government has to borrow money to make up the difference." In other words, the deficit is "the total amount of new federal debt at the end of a fiscal year, not including interest on previous debt".
- "Budget Cycles" are worth mentioning as well. The "Budget Cycle" for any President begins the first Jan. after taking office and ends the first Jan after leaving office. For G.W. Bush, his budget cycle began Jan. 2001 and ends Jan. 2010, with 2002 being the first year attributable to George Bush. (Elected in 2000, takes office 2001, first budget is for year 2002. Obama: elected 2008, takes office 2009, first budget is for year 2010.)
- Another factor that is worth mentioning is that the budget begins in the White House and is then sent to Congress.
Sen. Jon Kyl (R-AZ) recently told NBC's David Gregory "Remember, we just had the figures come out earlier this week, a 1.4 trillion dollar deficit, more than all four of the last budget deficits combined."
Last week CNN reported that 2009 was the first year for a trillion dollar deficit. CNN's Louise Schiavone reported on August 25, 2009 that the expected deficit for 2009 is expected to be 1.6 trillion, "four times larger than last year's (2008) deficit."
For 2008, the "official" deficit listed as 455B. This is the number Sen. Jon Kyl was using when he stated the current deficit is "more than all four of the last budget deficits combined." Here's why that is less than honest - well, without speaking to intent, let it be said that here is why that statement is less than accurate.
Will The Real Budget Deficit for 2008 Please Stand Up!
G.W. Bush had a habit when it came to the budget he sent to congress: he didn't include the costs of the war in Iraq and Afghanistan. These costs were "off budget", which means he didn't include them in his budget to congress so the cost of the war doesn' t show up in the "official" deficit for those years. Double-think good about that: the cost of the wars are not included in the official numbers used for the budget deficits for the Bush Era.
Therefore, his "deficits" looked like this (in billions): 2002 = 157.8 ; 2003 = 374; 2004 = 413; 2005 = 319; 2006 = 248; 2007 = 162; 2008 = 455
When Sen. Kyl says the current deficit is greater than the last four combined, he's excluding the cost of the Iraq/Afghanistan wars.
Here are the actual deficit numbers as reported in 2008 in the Alternate Fiscal Deficit and Debt Reported by U.S. Treasury for 2008:
The "Alternate Deficit and Debt" report includes both on and off budget items. The first column is the "official" deficit number and the second column is the "actual" deficit of the federal government. Neat trick, isn't it?
This report is necessary simply due to the need for the government to deal with reality (at least, off the record). This chart clearly shows two things: the "real" deficit for 2008 is $1.009 trillion, not the often quoted $454.8 billion and the first year of a trillion dollar deficit was 2008, not 2009.
This shows the deficit for 2008 as being just over one trillion dollars and does not include the Troubled Asset Relief Program (TARP). The TARP's purpose was to purchase or insure up to $700 billion of "troubled" assets and was passed in 2008, but will show up as an expense in 2009.
This report is necessary simply due to the need for the government to deal with reality (at least, off the record). This chart clearly shows two things: the "real" deficit for 2008 is $1.009 trillion, not the often quoted $454.8 billion and the first year of a trillion dollar deficit was 2008, not 2009.
This shows the deficit for 2008 as being just over one trillion dollars and does not include the Troubled Asset Relief Program (TARP). The TARP's purpose was to purchase or insure up to $700 billion of "troubled" assets and was passed in 2008, but will show up as an expense in 2009.
Standing up as the REAL DEFICIT for 2008 is the amount of one trillion, nine billion and some change.
Budget Cycles
As mentioned earlier, budget cycles are also important when it comes to federal budgets. There is a lot of talk as of late about "Obama's exploding deficit" for this year. First of all, it is a fact that this year (2009) is the last year of Bush's budgets. President Obama will have the opportunity to send his budget proposal to congress later in 2009.
Fox News reported in June of this year that the deficit topped $1 trillion for the first time, again using the lower "official" number rather than the actual or "alternative" number: "The Treasury Department said Monday that the deficit in June totaled $94.3 billion, pushing the total since the budget year started in October to nearly $1.1 trillion." This surge in the deficit was a result of the Bush TARP expenditure, falling tax revenues and other emergency measures.
But wait, there's more: expect the deficit this year to be in the neighborhood of $2 trillion! TARP and the bailout are a huge part of that deficit. There is also the 550 billion dollar deficit from spending more than is collected and then the cost of the two wars. It is fair to attribute the cost of the wars to the Bush administration. It is fair to attribute the TARP to the Bush administration as well as the budget shortfall created from spending more than the government is collecting (about 550 billion). One can agrue over who should get the red ink on the bailout ($800 billion). One could also argue about the other emergency spending done since Bush left office. One can not, with a fair mind, argue that Bush did nothing other than to leave the Obama administration with an exploding deficit.
Agree? Disagree? Please leave a comment!
As mentioned earlier, budget cycles are also important when it comes to federal budgets. There is a lot of talk as of late about "Obama's exploding deficit" for this year. First of all, it is a fact that this year (2009) is the last year of Bush's budgets. President Obama will have the opportunity to send his budget proposal to congress later in 2009.
Fox News reported in June of this year that the deficit topped $1 trillion for the first time, again using the lower "official" number rather than the actual or "alternative" number: "The Treasury Department said Monday that the deficit in June totaled $94.3 billion, pushing the total since the budget year started in October to nearly $1.1 trillion." This surge in the deficit was a result of the Bush TARP expenditure, falling tax revenues and other emergency measures.
But wait, there's more: expect the deficit this year to be in the neighborhood of $2 trillion! TARP and the bailout are a huge part of that deficit. There is also the 550 billion dollar deficit from spending more than is collected and then the cost of the two wars. It is fair to attribute the cost of the wars to the Bush administration. It is fair to attribute the TARP to the Bush administration as well as the budget shortfall created from spending more than the government is collecting (about 550 billion). One can agrue over who should get the red ink on the bailout ($800 billion). One could also argue about the other emergency spending done since Bush left office. One can not, with a fair mind, argue that Bush did nothing other than to leave the Obama administration with an exploding deficit.
Agree? Disagree? Please leave a comment!
References:
2009 Federal Deficit Could Go As High As $2 Trillion
http://www.dailyreckoning.com.au/federal-deficit-2-trillion/2008/10/13/
Federal Budget Deficit Tops $1 Trillion for the First Time
http://www.foxnews.com/politics/2009/07/13/federal-budget-deficit-tops-trillion-time/
December 2008 - GAAP-Based 2008 Federal Deficit
2008 Financial Report of the United States Government
A History of Surpluses and Deficits in the United States
Historical Tables - Budget of the U.S. Government - Office of Management and Budget - Fiscal Year 2010
http://www.whitehouse.gov/omb/budget/fy2010/assets/hist.pdf
Deficits and Debt 101
http://www.americanprogress.org/issues/2009/09/deficits_debt_101.html
Kyl doubts people die from lack of health insurance. You see what I'm talking about?
http://videocafe.crooksandliars.com/david/kyl-doubts-people-die-lack-health-insurance
"Budget deficit shock" CNN's Louise Schiavone reports on the soaring federal budget deficit.
Trillion dollar deficit
Trusting a Republican with numbers is like putting a gun to your head and asking the Republican to hold it for you. Democrats would be making a mistake if they try to respond with a bigger exaggeration, but they must push the truth as if it were an election year. It soon will be.
ReplyDeleteThe National debt at the end of World II was not 7% of GNP but actually exceeded the GNP. With in three years we had entered one of the longest periods of prosperity in the history of the Nation. The Republicans evade the truth when predicting disaster. Anyone who believes we depend on China or any Nation for money to finance the debt does not understand how the Federal Reserve Bank System works.
ReplyDeleteIf America really wishes to stop sliding into the third world they must break the dependence on foreign oil with a program like the one that let us win the "Race to the Moon" It is not money but resources that make us slaves.
From page 128 of Historical Tables - Budget of the U.S. Government - Office of Management and Budget - Fiscal Year 2010, retrived from http://www.whitehouse.gov/omb/budget/fy2010/assets/hist.pdf
ReplyDelete.................. Gross Federal Debt
2007 .......... $8,950,744,000
2008 ...........$9,985,757,000... Read more
======================
Differance = $1,035,013,000
The amount of debt owed by the federal government increase $1,035,013,000 between Oct. 1, 2007 and Oct. 1st, 2008 (federal fiscal year).
The "official" deficit is $455 billion. the "actual" increase in national debt is $1.035 Trillion.
Cost of the war is off the books. Any FAIR minded person can duplicate this result from the sources given as well as other sources.
As long as we're on the subject, this year is even worse. From the same sources:
.................... Gross Federal Debt
2008 ............ $9,985,757,000
2009 (EST).. $12,867,455,000
======================
Differance = $2,881,698,000
Yes, that is correct. The "official" deficit is $1.4 trillion - add in the war (off budget), and the TARP (off budget) and the "actual" est. deficit for this year's budget is a whopping $2.88 trillion.