September 12, 2011
As Seen While Walking to Work

Bumper sticker attached to a trash can:

"Work harder. Democrats want to spend your money!"

While this does capture a certain mood in this great country, it is perhaps a bit one-sided. The spending urge is among our most bipartisan instincts. If anything, over the last 30 years Democrats have been more fiscally responsible, since at least “tax and spend” is more logical than “don’t tax and spend any way!”

Need proof? Here’s a graph of debt growth by presidential era since World War II:

debt growth

In general, debt has grown faster in Republican eras than Democratic ones. There are many reasons for this, but the fact remains the same. (Obama will increase the debt much more than most recent presidents have, rebalancing this observation somewhat.)

And all in all, it’s not that hard to explain: presidents promote programs that neither they nor Congress wish to increase taxes to pay for, or to cut other programs to pay for. For Reagan, it was defense; for Bush II it was tax cuts, two wars and prescription medication for seniors; for Obama it’s two wars, tax cuts, and the stimulus. So we borrow.

The math isn’t hard, people: you can pay for the government you have (with tax increases), or you can have the government you pay for (with program cuts). The third way—borrow the difference between wants and willingness to pay—is the easier option, and so it’s the one pretty much everyone has taken for the last 80 years—with the last 30 being particularly intense examples of the practice:

debt growth

Grow up, America. There’s no free lunch. The government way is taxes; the libertarian way is fees: in either case, you pay. 

June 26, 2011
Ignoring the Debt Ceiling

Can Obama just ignore the debt ceiling and keep funding government? An interesting article from Matthew Zeitlin at The New Republic. It’s worth a read.

h/t: The Monkey Cage

March 24, 2011
The problem: summarized

In light of an article in today’s NY Times, about the fact that (inevitably) state budget cuts are transferring costs for education and other services to cities, who then either fire workers or raise property taxes to try to survive, I thought I’d try to summarize the complex interactions of the budget politics of the last 30 years in a few graphs and slides. This is a first for me on Tumblr, but here goes.

First is a graph of declining tax rates for the better off over the last 30 years, as well as a depiction of the shift in tax burden onto payroll taxes (which, since they are income capped, disproportionately affect the middle and working classes):

tax rates

Second is a graph of increases in the federal budget deficit over the last several decades. For fairness’ sake, it should be noted that the chart stops in 2009, so that the large 2010 deficit under President Obama does not appear:

federal debt

Third is a chart depicting what programs people want to cut, by political party. Notably, even Republicans (red) don’t want to cut most federal spending:

program cuts

Your mission, should you choose to accept it, is: square the circle. Enjoy!

August 18, 2010
Some budget facts

As debate ensues about deficits, and tax cuts, and the mid-term elections, I thought I’d offer some straight facts about where government gets its money, and what it does with it. 

Where government gets the money: (for FY 2008; the percentages are not much changed since then although borrowing has gone up with TARP and the stimulus package)

Source                                                            Collections (FY 2008)

Individual income taxes                       $1.146 tn 38%

Social security taxes/Medicare, etc.             $901 bn           32%

Corporate taxes                                    $304 bn           13%

Other (excise, etc.)                                     $175 bn           6%

Borrowing                                                  $459 bn           9%

What government does with the money

Program                                                Expenditures (FY 2008)

Social Security                                     $612 bn           20.5%

Medicare                                                $386 bn           13%

Interest                                                            $253 bn           8.5%                         [entitlements/

Medicaid                                                 $201 bn            6.7%                        mandatory payments]

Other mandatory programs                   $411 bn            13.8%

                                                            ——————————————

                                                            $1.863 trillion

Defense (include Iraq/Afghanistan)         $666 bn            22.3%                       

Entitlements + defense = 84.8% of budget]

NOTE: Everything else = $554 bn; 15.2%

National debt over time, 1945-2010 (in constant, 2007 dollars)

1945:          $3.2 tn. (est.); end WWII. Roosevelt/Truman

1950:          $2.2 tn. Truman

1955:          $2.0 tn Eisenhower

1960:          $2.0 tn. Eisenhower

1965:          $2.0 tn. Kennedy/Johnson (Vietnam War)

1970:          $1.9 tn. Johnson/Nixon (Vietnam War)

1975:          $2.1 tn. Nixon/Ford

1980:          $3.0 tn. Carter

1985:          $4.2 tn. Reagan

1990:          $6.2 tn. Reagan/Bush 41

1995:          $6.3 tn. Clinton

2000:          $6.8 tn. Clinton/Bush 43

2005:          $9.0 tn Bush 43 (Iraq/Afghanistan; tax cuts)

2008:          $9.6 tn. Bush 43 (Iraq/Afghanistan, tax cuts; TARP; recession)

2009:          $1.5 tn. Bush 43/Obama (Iraq/Afghanistan; tax cuts; TARP; recession; stimulus package)

2010:          $1.5 tn. Obama (Iraq/Afghanistan; tax cuts; TARP; recession; stimulus package)