The Four Causes of the Huge Deficit

recession-deficit-cause.png

What Are the Four Causes?

  1. The biggest cause: Reduced tax payments
  2. Second: Automatic increases in unemployment insurance and food stamps, and people starting social security* early because they can't find jobs.
  3. Military spending also increased, but is now fading.
  4. Bush's TARP and Obama's Jobs Stimulus (top layer) account for little of the deficit, and they are temporary.
  • The deficit is from the safety-net helping the poor and the unemployed in a terrible recession, and helping all of us (including businesses!) with lower taxes.

* There are two main definitions of the Debt and the Deficit.  Because Social Security has run a large surplus for years it reduces the small of these definitions, but not the larger ones which excludes its net income. During the great recession, this net income stopped for a while. This caused the smaller (and more common) definition of the deficit to increase.

Now find out: Is the federal government growing?