Story after story on the full-year results for the federal budget refers to the size of the full-year deficit for the fiscal year that just ended on September 30 ($455 billion), and how it compares to last year's deficit ($162 billion).
Almost none of them talk about why the deficit ballooned.
I wonder why?
Could it be because the Democrat-controlled Congress of Nancy Pelosi and Harry Reid allowed spending to spiral out of control?
Yes it could:
Sources: U.S. Monthly Treasury Statement, September, 2008; U.S. Daily Treasury Statement, September 30, 2008)
The upper area in the chart shows what happened during the last budget year of Republican Congressional responsibility. Though Republican-controlled Congresses allowed spending to increase way too much during most of the Bush Administration (unfortunately, with the President's acquiescence), the final budget it passed actually ended up causing spending to increase at barely more than the 2.76% rate of inflation during the period (208.49 divided by 202.9 at the link). Meanwhile, receipts, still carrying nearly a full head of steam from the Bush tax cuts of 2003, went up nicely by 6.7%, and the deficit fell.
As you can see from the lower area of the chart, that isn't what happened during the first fiscal year for which the Democratic Congress of Nancy Pelosi and Harry Reid had responsibility. Spending ballooned by over 9% (or almost 12.6% if you treat the stimulus checks as outlays), well in excess of the period's inflation rate of 4.9%. (218.783 divided by 208.49 at the link). The $249.5 billion year-over year increase in spending is well over 80% of the reason why the deficit increased by $293.3 billion.
Hardly any media outlets have gone beyond reporting the overall size of the deficit. Examples of those who only reported the deficit, and little else relevant to the just-completed fiscal year, included the following:
- Investment News, which said that the fourth fiscal quarter increase in the deficit vs. estimates occurred because of "Stimulus tax rebates, the $700 billion financial services industry bailout, and increased spending in the Middle East ..... according to the Department of the Treasury." Someone needs to remind Treasury that the "bailout" didn't pass until October.
- CQ Politics focused on future deficits that could run as high as $1 trillion, but said nothing about this past year's spending.
- Martin Crutsinger of the Associated Press filed a 600-plus-word article, yet said nothing about fiscal 2008's spending. He did, however, find space for the usual "the country will not be able to avoid a recession" verbiage for which he has become infamous, to misstate the current-year cost of the stimulus package as $168 billion, and to make it appear as if that $168 billion entirely consisted of stimulus checks to tax-return filers. As seen above, the stimulus checks amount to "just" $94 billion of the total package; much of the rest of the hit against receipts won't take place until the fourth calendar quarter, as businesses take pre-year-end advantage of the increased deductions for equipment purchases that were part of the package.
- Reuters? Not a word.
- The LA Times's Richard Simon also had nothing to say.
Two outlets that did catch the spending result include All Headline News, in its fifth paragraph, and Thomson Financial at Forbes.com, in its third.
Thomson also noted that the past year's spending was "above the 40-year historical spending average of 20.6% (of GDP)." Yet, according to the Republican National Committee's Obama Spend-o-meter, Barack Obama has additional spending plans amounting to almost $1.3 trillion. Even if you spread that over four years, the annual increases are larger than the past year's ridiculous increase -- even before considering the increased costs of existing programs.
If I didn't know better, I'd say that Old Media is hush-hushing the wasteful ways of the current Congress in the interest of enhancing the re-election chances of its Democratic members.
Actually, since similar reports in previous years routinely reported total receipts and outlays, I do know better. They are.
Cross-posted at BizzyBlog.com.
