What Are the Four Causes?
- The biggest cause: Reduced tax payments
- Second: Automatic increases in unemployment insurance and food stamps, and people starting social security* early because they can’t find jobs.
- Military spending also increased, but is now fading.
- 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?
