2016 Postmortem
In reply to the discussion: So is this forum now a President Obama criticism free zone. [View all]Igel
(35,300 posts)It's both/and.
The deficit in 2002 and 2003 had three causes. Increased military spending. Tax reductions. Recession. Any of the three was enough to wipe out the projected budget surplus. We had all three.
Many picked one as the real cause of the deficit, forgetting that "wipe out the projected budget surplus" is different from "causing a $300 billion deficit." Wipe out the surplus and you're left at $0, not $300 billion in the hole.
Get entirely rid of the * tax cuts, all the Obama tax cuts, and this year Obama said he expected a $900 billion deficit. That's a combination of increased spending--far above the rate of inflation--and decreased revenue from projected amounts. One # I heard was an 18% increase in discretionary spending after inflation in 4 years. That's a fair amount. But only a bit of the increase in the deficit has been discretionary spending. The deficit is larger than 100% of discretionary spending. It's non-discretionary spending that's soared. Part of that's recession. Part is demographics. Part is policy.
Note, though, that in 2012 tax revenue, even with the various tax cuts in effect, hit the same levels that it had in 2008. So revenue's down, but only from what was it would have been with inflation and economic growth.