Deficit Discussion

For the past couple of years everyone has been paying attention to the US deficit/debt problems. After reading an article on CNBC today about the issue, where a senator was quoted as saying that obviously we cutting spending wasn't going to fix the problem by itself and we need to cut spending and raise taxes jointly for the fix, I started wondering how the government revenues look today vs 2000 when we had a massive $200 Billion budget surplus.

So I did a google search and came across this website: usgovernmentspending.com. According to this site, which seems legit, in 2000 we had tax revenue of 3.7 Trillion. In 2010, we had tax revenue of 4.2 Trillion. Hmmm. That looks like a 15% increase in revenue, on top of 200 Billion surplus. In a 2-3% inflation environment, I can see how you might have swung to a deficit during this period, but overall, revenue doesn't seem to be the problem. Let's take a look at government spending over the same time period:

2000 Total Government spending; 3.2 Trillion (my memory tells me we had a 200 billion surplus back then, but according to this site it was even larger)

2010 Total Government spending: 5.8 Trillion

The growth in spending is 80%. What the ef?!?!?!?!!!!!!!!!!!!!!!!!!!!!!!!!

I am left wondering how this could happen. Is it more people on Social Security, the IRAQ/AFGAN wars, Medicare part D? Let's take a look at the spending in 2007 before the financial crisis and before Obama's stimulus plan:

2007 Total Gov't Spending: 4.9 Trillion. So it looks like a lot of the spending was baked in prior to the crisis.

Based on this research it is clear to me that government revenue is not the problem, the spending is the problem. Revenue has been growing slowly over the past ten years, while the rate of change of spending has been out of control. So why are our elected officials on record saying the solution must include higher tax revenues? It seems to me if we can just roll back some of the spending increases over the past several years we would be in much better shape. Instead, the President and Congress can't seem to cut anything. I vote for a mandatory balanced budget amendment.