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Federal Budget: 1990 – 2019 August 13, 2019

Posted by geoff in News.

A lot of people squawk about the budget, but most people just cherrypick the data to score a political point.

Not here at IB. Here at IB, we crank through chart after chart after painful chart to drag our weary brains to the truth. Because masochistic pedantry is what we like. Or what I like, at least.

So here’s what you owe (actual data through 2018, 2019 is CBO projection as of May):

Public Debt 1990-2019

A little depressing, no? “But,” you ask, “is it the fault of spending or of revenues?

I knew you wanted to know that, so I made this nice little chart for you:

Outlays 1990-2019

So discretionary outlays (of which half are spent on defense) aren’t really hurting us, but the big jump in mandatory outlays in 2009 has led us to a “new normal” where mandatory spending has risen from 10% to 12.5% of GDP.

As you can see from the debt increase, the new level of mandatory spending is unsustainable at our current revenue rates, which, BTW, are:


Kind of where they’ve always been.

Pretty clear that discretionary spending has recovered from its highs during the recession (I’m sure we all recall the spectacularly unsuccessful stimulus), and revenues have recovered from their lows during the recession, but the permanent increase in mandatory spending is sinking our battleship.

That increase is not really a Bush vs. Obama thing. It’s more a Nancy Pelosi/Harry Reid kind of thing.


1. Jimbro - August 13, 2019

I like the charts and the Economics For Dummies* explanations

* Present company excluded of course

2. Bunk Strutts - August 14, 2019

Cool. Now show a graph of military spending vs. entitlement spending, and compare both to the entire US *ahem* budget.

3. Bunk Strutts - August 14, 2019

A couple years ago I cranked some numbers about the minimum wage, culled from the US Bureau of Stuff. Sure, it’s blogwhoring, but so what. I like this place.


4. geoff - September 12, 2019

Issues & Insights wrote pretty much the same article today (w/o the compelling graphs, of course), concluding:

The entire increase in the deficit over last year is due to rampant spending increases, not the Trump tax cuts.

5. Mark in NJ - September 12, 2019

But wasn’t the promise of the Trump tax cuts that they were gonna generate all these bigly revenues?? I don’t see those on graph #3.

6. geoff - September 12, 2019

The “bigly revenues” track with the GDP, so they wouldn’t show up on that chart.

7. Mark in NJ - September 12, 2019

To clarify…the bigly revenues were realized but didn’t show on that particular chart, or they never actually materialized?

8. geoff - September 13, 2019

From the Issues & Insights article linked in 4.

But the report shows that revenues climbed 3.4% so far this fiscal year. Spending, however, shot up by 6.4%.

Look within the data, in fact, and you see that the tax cuts are working as promised – by accelerating economic growth, they’re at least partially paying for themselves.

Take corporate taxes. Ask any Democrat running for president and they will bemoan the tax “giveaways” to giant corporations. What they won’t tell you is that corporate tax revenues are up 5%.

In fact, corporations paid $8 billion more in the 11 months of this fiscal year than they did in the same period of fiscal year 2018. That increase alone is enough to fully fund the Environmental Protection Agency for an entire year.

What’s more, the CBO notes that corporate income tax payments through May were on 2018 activities. When you compare corporate taxes from June through August to same months last year, they are already up $18 billion – a 48% increase!

Meanwhile, individual income and payroll taxes are up $82 billion – a 3% increase over the prior year. Payroll taxes alone, which are a good indication of how well the job market is because they are automatically deducted from every worker’s wages, are up 6.4%.

Spending is decoupled from GDP (i.e., with deficit spending you can spend an arbitrary amount, regardless of GDP), but revenues are pretty much directly linked to GDP.

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