The Real Causes for Deficit Spending

This is fantastic, that you Aaron.

Now,if you could get that onto a few leftie blogs,either here,or the dead tree industry,the resulting fun would be enormous! Well done. Thanks Aaron.

Q: Who knew socialism (money transfers) would make up more than 50% of deficit spending?
A: Anyone who wants deficit spending!

There's a lot of socialists out there.

Nice charts. As you say, wasted on the Lefties. But still nice.

60+% of total government spending is "social programs", otherwise known as VOTE BUYING. More than half of which is now borrowed money, despite the total taxation on most citizens being about 50% of their total income.

In Rome it was bread and circuses. Probably about the same % of spending. Didn't turn out well, as I recall.

Government began to borrow from private sources in the 70's after Trudeau changed the Bank of Canada Act in 1974.. Banks love socialist spending. Transfers wealth from the middle class to the already extremely wealthy. Sounds like just what the good socialists ordered.

Hi, Captain C.

I put up a comment a while ago, and it didn't make it to the comment section. Did you not like it? Or was it too off topic?

Harper can brag all he wants about his financial prowess, but truth be known the federal government has downloaded many of their fiscal problems to the provinces who in turn downloaded them to municipalities. At the end of the day the hapless taxpayer is still on the hook for everything. To add insult to injury then burdened with the costs and hassles of redundant layers of bureaucracy.

What Cap has presented is only part of the picture. It explains where the growth in spending took place but not when. In the early 1970s and before (post WW2) the typical pattern of US federal government spending was about 17% of total GDP collected in revenue and about 18% of total GDP spent that year in total spending.

However, this changed drastically in about 2006. There the revenues declined a bit to about 16%, but expenditures shot up to about 23%. The reason was the Democrat Congress passing the expansion of Medicare with the national drug program. This is where the deficit really started to balloon, because there were no significant revenues associated with this program.

Obama has simply made things worse, but it was the Democrat Congress which kicked the door wide open in the last few years of the Bush presidency. Prior to that, the 1% difference between taxing and spending could be easily managed, because US economic growth was well in excess of 4-5 per cent, just about every year since about 1950. Such strong economic growth shrank the relatively small deficit to unimportance because every year it was being swamped by the wave of new economic growth and consequently additional government revenues.

But, economic growth fell off a cliff in 2007, and its been anaemic ever since. That's why the deficit which once could be easily managed is now a devastating problem.

There are different names for it, but the "cause" of deficit spending is the ability of governments to spend without requiring a plan for raising the money spent.

I vote you in to govern for four years. Any amount you want to spend is fine, as long as you raise enough in taxes to cover it. Heck, you can even borrow, as long as before your term is up, you raise enough money to pay it back - plus interest.

Otherwise, you're stealing from the next government (and stealing from them is really stealing from me - who pays the taxes) - committing them to something they might not want to be committed to, or be elected for.

We fought a revolution partly to stop "taxation without representation" - who's going to explain that to future voters who inherit our debts?

Now I'm afraid its too late - the US was sunk when a majority of voters depended on government handouts. That situation would be impossible if the government had to tax in order to raise its vote-bribing funds. Now, no meaningful change can happen.