Federal Budget Deficit Seen In Perspective

I like to see things in perspective (such as in a related story that I posted here), such as this graph from the OMB, thoughtfully passed along by the Lonely Conservative web log:

The first thing that one notices -- even without the colour distinction -- is the incredible plunge (increase? - depends on your definition) that the deficit has taken since the Obama administration has taken over.  Yes, it clearly begins with the end of Bush II, but the acceleration after Obama takes hold is stupifying.

From a historical standpoint, though, you will notice how the budget started to turn around at the end of Reagan's term, as Reaganomics predicted.  It continued into the Clinton administration, together with the 'dot com boom', which blew toward the end, starting the recession that carried into the first part of the Bush II years, and of course accelerated after the attacks of 11 September.  There is then a rapid turn-around which can be attributed to the Bush tax cuts, until the housing bust which Barney Frank (D-MA) and Chris Dodd (D-CT), more responsible than others, insisted wasn't going to happen.  Bush openly takes responsibility for his part, but there was enough blame to go around on that score, particularly when the Bush administration started warning about the pending crisis as far back as April 2001, to the derision of Barney Frank.  But it is difficult to imagine just how the problems associated with the economics of the end of the Bush years can contribute to such a massive down-turn that took off after Obama. 

Even if the stimulus (or perhaps more accurately -- stimuli) works (a Pollyanna would say 'doubtful'), the turn-around time for the national economy could well be unto the next generation.

*****

Update: The market tanked on the following Monday after the S&P downgrade.  Analysis supports the conclusion above (see update on the post for more).