Chart of the Day

A peek inside the deficit, from Veronique de Rugy in American magazine:


source: American via CBO

As de Rugy explains, the problem is spending under both Bush and Barack:

In Washington, a common explanation is that the recession produced the deficit. To be sure, as the graph displays, the recession caused lower than expected tax revenue--$419 billion lower, in fact. The recession caused corporations to make less profit, and individuals to earn less income, which also meant less money for the government.

But the reality is that this deficit is largely the product of government spending, as spending makes up the bulk of the deficit. Indeed, $459 billion of the deficit came from spending decisions made in the years preceding 2009. In 2009, the government added an additional $592 billion to this previously projected deficit; $245 billion for the financial bailout and $347 billion on stimulus spending. The only piece of good news comes from the projected cost of the interest we have to pay on the debt. Lower-than-projected interest rates reduced this amount by $61 billion. However, overall, spending accounts for more than $1 trillion of the entire deficit.

Agreed.