US Government’s Spending Spree Timeline

US Federal spending over the last ten years went through a dramatic shift from borrowing around $140B/year to consistently borrowing over $1T/yr (or a nearly a ten fold increase). How did this happen? The following three charts cast light on that spending spree timeline.

Each chart shows total Federal Outlays (or spending) in red, and total Federal Receipts (money coming in through taxes) in green. The gap between the lower green line and the upper red line is the money borrowed by our government to pay its bills. Long-range OMB projections, going out beyond 2050 never forecast those two lines to cross. Said another way, we will drown in debt unless we change course and balance our budgets.

Chart 1 highlights a few key points during the Bush administration.

  1. President Bush cut taxes early on. Despite an initial decline in federal revenue, as is the case every time that it’s tried, revenue grew rapidly and was closing on federal spending, despite the added cost of the Global War on Terrorism.
  2. Democrats took over the House of Representatives and Senate in January 2009, electing Nancy Pelosi Speaker and Harry Reid Majority Leader. Spending began to accelerate as soon as they took control.
  3. At the end of the Bush Administration, the housing bubble (created by Progressive/Liberal Social Wealth Redistribution Mortgage Policies started in the Carter Administration) burst and brought on nearly $450B in TARP spending (then Senator Obama voted for it).
Chart 1

Chart 1

Chart 2 highlights a few key points in President Obama’s first term.

  1. Democrats expanded their majority in the Senate, and kept Senator Reid as the majority leader.
  2. President Obama was sworn in Jan 09, and passed his stimulus in February 09.
  3. The last budget until fall of 2013 was passed in April 09.
  4. After the April 09 budget, continuing resolutions were used to fund the government. These CRs basically acted like copies of the April 09 spending. The stimulus, which had massively raised spending and was supposed to be a one time deal, got perpetuated every year through the CR process. Could that be the reason why Senator Reid refused to pass budgets each year?
Chart 2

Chart 2

Chart 3 highlights a few additional key points.

  1. The GOP regained the House majority, in a massive 2010 mid-term election.
  2. Republicans, with control of the House and with Speaker Boehner taking the gavel from Congresswoman Pelosi, were able to stop the rapid growth in federal spending. The growth in spending from 2007 to 2010 was now “baked” into the federal baseline, and repeated through CRs.
  3. Federal spending exceeds receipts forever. A good place to start in reducing the spending requires going back to 2007 spending levels in every department. Find the “one-time” funds and cut them out of the federal base budget.
Chart 3

Chart 3

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