March 30, 2009 by webnerbob
This graph, taken from the Washington Post website and based on CBO and OMB data, tells several interesting stories. One is the impact of 9/11 and the recession and military spending that followed on the federal budget. Another is the clear trend in reduction of budget deficits from 2004 until the economy hit the wall and the first bank bailout legislation was passed in 2008. And the third is the order of magnitude difference between the actual Bush Administration deficits and the proposed Obama Administration deficits — a breathtaking fourfold increase in the deficit from 2008 to 2009 and then, even under the more optimistic White House projections, continuing deficits for 10 years that all are significantly larger than the largest deficit incurred during the Bush Administration.
It may be that the Obama proposal is what the economy needs — economists apparently disagree. What this chart demonstrates, however, is that if the Obama Administration budget is passed in anything close to its current form we are moving as a society into wholly uncharted territory. I doubt that anyone can predict with any certainty what the effect of such extraordinary deficit spending would be. It also is clear that, if the President’s proposed budget is enacted, considerable parts of the federal budget for years to come will be devoted to simply paying interest on our national debt — interest that will be paid to many foreign investors who purchase our debt instruments — rather than paying for infrastructure improvements, or military equipment, or health care, or other federal programs. I am sure that no one thinks that inevitable result is a good thing.