I follow many different people on
twitter, some of which are progressives. I find it informative to
know all sides of the conversations. Occasionally something comes my
way that I find amazing. Someone posted an article bragging about how
the democrats have brought down the deficits leaving the Tea Party
and GOP without a platform on which to run.
To
the left you find one of those
charts. I first noticed that it's inverted. In typical charts high
figures are at the top. Although the chart is correct math-wise,
the brain can often get the opposite impression. Now let's look at
the labels. We must first note that it's a graph of debt per
GDP(Gross Domestic Product). If the deficit remains steady or
increases at a slow rate, and the GDP grows, the percentage will
drop. As of 2012 the GDP was $15.6 trillion. At the end of the same
period the total deficit was approximately $16 trillion. This would
put the deficit at nearly 100% of GDP.
Looking at the charts we will see a
slight decline of debt to GDP ratio. This is because debt has been
growing annually at a pace lower than GDP growth. Sounds great,
right? Let's look at actual debt. At the end of 2013 we now have more
than $17 trillion in debt. Now let's look to why debt is growing at
a lower pace. Budget spending has increased only 1.4% annually since
2009. This is because of T.A.R.P.(Toxic Asset Relief Program) that
was placed into the 2009 budget. This alone increased the budget by
$700 billion.
There hasn't been a budget passed since
2009. Each year government has practiced baseline budgeting –
meaning discretionary spending of the current budget is increased 5%.
This accounting trick made it look like annual spending increased
only 1.4%. By doing this they were able to keep T.A.R.P. level
spending while making the numbers look good. Because of budget
Continuing Resolution battles deficit spending has dropped somewhat,
but deficits still range from $500 billion to $1.5 trillion in 2009
as a result of T.A.R.P.
