Saturday, November 10, 2012

Yes, It's All About the Math

Over the last few weeks, people from the guests on "Morning Joe" (and Joe himself) to the "Center for American Progress" have been claiming that the mounting budget deficits are all about the "math".

Of course, they are right.  Unfortunately, many of these folks don't seem to understand the real math.

Here is the real budget math, from the White House Office of Management and Budget. (All numbers are expressed in terms of percentage of GDP):

Truman through Bush I:
- Federal Spending: 19.5%
- Tax Receipts: 17.7%

- Federal Spending: 19.8%
- Tax Receipts: 19.0% (20.5% in 2000 -- this was the .com bubble that the balanced budget)

Bush II
- Federal Spending: 19.6%
- Tax Receipts: 17.6%

- Federal Spending: 24.4%
- Tax Receipts: 15.4%

As much as I dislike George W Bush, the numbers show that his spending and taxes were right at the post WWII average.  (I wanted lower spending and taxes.)

But, who is the real outlier here?  It's Barack Obama.  His average annual spending is 25% above the post WWII average (because of growing government transfer programs) and 13% below the historic average for revenue (because of the sluggish economy).

I am a total numbers guy. The numbers from the White House Office of Management and Budget paint a very clear picture.  Government spending is the problem.

This is called real math.

1 comment:

dave.mackey said...

Interesting. do you have numbers from the FDR administration during WW2? What percentage of Obama spend was due to concluding the war in Iraq, bailouts of the Financial and Auto industries? Is that spending already factored out?