"Statesman details:
The U.S. federal deficit was slightly smaller through the first five months of this fiscal year than the previous year. Still, the deficit is on pace to exceed $1 trillion for the fourth straight year, which could be an issue in this year's presidential election.
The Treasury Department said Monday that the deficit grew by $232 billion in February. That increased the imbalance through the first five months of the current budget year to $581 billion, or 9 percent less than the same period in fiscal 2011.
The Obama administration expects the deficit will reach $1.3 trillion when the fiscal year ends Sept. 30. The government ran a record deficit of $1.41 trillion in 2009 and a $1.29 trillion deficit in 2010.
While the
scale of deficits has been alarming, it should come as no surprise given the
huge incentives for politicians to push revenues lower and spending higher, as
well as the strong dependence for improvement (of both the revenue and spending
side) on a weak underlying economy.
Politicians
like to be elected. On the spending side of
the equation, the easiest way (it seems) to
be elected in the U.S. is to spend during prosperous times, as voters (not
surprisingly) like to feel prosperous during these prosperous times (hence the
limited number of times the below chart turns negative). One issue is that
spending moves even higher during downturns due to all the social safety nets
that kick in, pushing the deficit higher and higher each business
cycle..."
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