The Real Deficit Numbers

February 1st, 2010 by Lee Eldridge

President Obama during his State of the Union address said that the federal deficit was $1.3 trillion the day he “walked in the door”. This number didn’t make sense to me. It seemed too high. I did a little poking around, and here’s the rest of the story:

“In 2008, Bush ran a deficit of $485 billion. By the time the fiscal year started on October 1, 2008, it had gone up by another $100 billion due to increased recession-related spending and depressed revenues. So it was $600 billion. That was the real Bush deficit.

“But when the fiscal crisis hit, Bush had to pass TARP in the final months of his presidency which cost $700 billion. Under the federal budget rules, a loan and a grant are treated the same. So the $700 billion pushed the deficit — officially — up to $1.3 trillion. But not really. The $700 billion was a short term loan. $500 billion of it has already been repaid.

“So what was the real deficit Obama inherited? The $600 billion deficit Bush was running plus the $200 billion of TARP money that probably won’t be repaid (mainly AIG and Fannie Mae and Freddie Mac). That totals $800 billion. That was the real deficit Obama inherited.

“Then…he added $300 billion in his stimulus package, bringing the deficit to $1.1 trillion. And falling revenues and other increased welfare spending pushed it up to $1.4 trillion.

“So, effectively, Obama came close to doubling the deficit.”

If anybody has any numbers different than this, I’d like to see them. This quote is from Dick Morris’ website.

And today, the White House unveiled its new budget. According to Yahoo News:

“If Congress goes along with Obama’s election-year plan, the nation would still end the year with unemployment pushing double digits at 9.8 percent and this year’s pool of government red ink deepening to $1.56 trillion — by the administration’s accounting.”

That would basically be a doubling of our federal deficit in just two years. This is not fiscal responsibility. This is out-of-control expansion of our federal government.

Tags:

2 Responses to “The Real Deficit Numbers”

  1. Bobby Says:

    I thought the stimulus package was close to $800 billion?

  2. Lee Eldridge Says:

    Hey Bobby, I assume that’s because most of the stimulus money has not been spent yet. I did some quick googling and was unable to find a recent number. One article I found showed that as of last September, only about $84 billion had been spent. Not sure if this is accurate or not, but it’s probably close. That was one of the primary criticisms of the stimulus package when it was passed — that too little of the money would be infused into the economy in year one. And a lot of it would be spent in year two and later.

    I was against the stimulus package because of it’s size and scope. Very little of the bill actually had anything to do with stimulating the economy. Most of it was just more money for government programs.