I was going to hold onto this one until our future discussion of federal deficits, but the issue has come up in comments. So, here is a chart that shows what is–and is not–causing those huge deficits.
Interpreting the chart: The top line is the projected annual federal budget deficit. Notice it is expected to drop as recovery kicks in 2010-12 or so and then rise each year with no end in sight. BUT, compare the magnitudes of the components of the deficits, the colored chunks! The bailout of Wall Street (red) only adds much in the short term. The same is true for Obama’s stimulus (peach), which ends after a few years, as designed. [Note: The stimulus is the only addition to long term deficits that Obama is responsible for. Earlier, I linked to this article that explains that Obama so far is the culprit for only 16% of the deficit in 2009-10 (FYI, not sure if the two studies’ numbers are strictly comparable).]
The real big causes? Bush’s tax cuts from 2001-03 (blue), that mostly went to upper income people, and the recession (light blue), which dramatically lowers tax revenue and, less so, necessitates automatic spending increases, like unemployment insurance.
Anwd, where’s the coming tidal wave of red ink for increases in Medicare and Medicaid? They are down the road, after 2020, but they’re coming. Unless, of course, something is done to bring down health care inflation. Deficit reduction is health care reform. Unless you want to crush the Pentagon or repeal the Bush tax cuts.
[Shamefully late update: Oops. I forgot to attribute the source of the chart above.]