U.S. Deficit Exceeds $1 Trillion For Third Year Running
The Treasury Department announced Wednesday that the national budget deficit totaled $1.1 trillion for the year at the end of July, making 2011 the third straight year that the U.S. deficit exceeded $1 trillion. This year’s current deficit already exceeds that of 2008, and is likely to exceed last year’s $1.29 trillion deficit, though it will hopefully fall short of the $1.41 trillion record set in 2009.
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In the first 10 months of this budget year, spending increased 2.4% while revenue grew 8%. The fact that revenue increased significantly more than spending demonstrates that more people are working and paying taxes than last year, despite the fact that unemployment remains high.
While the government has reported a budget deficit in each of the last nine years, with 2011 soon to be the tenth, not until 2009 did the deficit even come close to crossing $1-trillion-mark. In 2001, the government recorded a $127 billion surplus, and expected surpluses to total $5.6 over the next decade. However, President George W. Bush’s broad tax cuts and U.S. involvement in Iraq and Afghanistan in 2002 quickly put an end to that, with the deficit reaching $454.8 billion in 2008, Bush’s last year in office, a new record at the time.
After that, deficits climbed into the trillions of dollars as the government had to spend more on unemployment insurance and food stamps and other attempts to bolster the failing economy. President Barack Obama’s $787 billion stimulus program, though commended by many for saving businesses and jobs, added to the deficit. The decision by President Obama and congressional Republicans to extend the Bush tax cuts for two more years only widened the deficit further.