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What is driving the deficit?

Nevertheless, the fact remains: Together with the economic downturn, the Bush tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years (see Figure 1).

The deficit for fiscal year 2009 was $1.4 trillion and, at nearly 10 percent of Gross Domestic Product (GDP), was the largest deficit relative to the size of the economy since the end of World War II. If current policies are continued without changes, deficits will likely approach those figures in 2010 and remain near $1 trillion a year for the next decade.


Asked by sweet-a-kins at 3:46 PM on Aug. 2, 2010 in Politics & Current Events

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This question is closed.
Answers (23)
  • The big corporations do have the money to hire people, they are choosing not to. They don't want to see the economy turn around. They need the republicans back in power so they can go back to no rules and regulations. It's not the taxing up the wazzoo. They made a ton of money that they are saving in off shore bank accounts.

    Spending does need to be done wisely. He wants to cut wasteful spending. But you still need to spend to get the economy back on track.

    If you want to talk about wasteful spending you should have brought up the wars.

    Answer by mommom2000 at 8:06 PM on Aug. 2, 2010

  • And BTW, WHAT caused the huge deficit under Obama and the NEED for the budget? WHAT factors contributed?

    Because it makes TOTAL sense to SPEND your way out of debt.......


    Answer by momof030404 at 5:45 PM on Aug. 2, 2010

  • The economy is the problem and we need to stimulate the economy to get ourselves out of the deficit. If the economy is thriving it brings more money into the government which automatically reduces the deficit.

    If "spending" is the answer, explain how why the PUBLIC EDUCATION SYSTEM is an overall failure, when an average of $14,000+ is spent annually on each student!? When you only throw money at a problem without correcting it, you get more of the same! The government being in charge of spending the taxpayer's money ad nauseum just produces more of the same...NOTHING!

    How would YOU stimulate the economy? How would YOU convince companies to HIRE people, when people are being laid off, are living on limited budgets and not buying their products, and production slows, while they continue to be taxed up the wazoo while having to continue to meet their quarterly projections, and overhead/employee expenses?!

    Answer by LoriKeet at 6:37 PM on Aug. 2, 2010

  • Unnecessary spending.

    Answer by yourspecialkid at 4:10 PM on Aug. 2, 2010

  • Really?! You want to continue to blame Bush for our dismal economy?! Wow. Just wow.


    Answer by LoriKeet at 4:11 PM on Aug. 2, 2010

  • The collapse of the housing pyramid scheme and the domino effect.
    Poly wars in the ME
    Loss of Corp tax base and family sustainable jobs

    Out of control spending to counter the aforementioned issues.

    Answer by Sisteract at 4:53 PM on Aug. 2, 2010

  • I agree Sisteract.
    It will take years to recover.

    Answer by gertie41 at 5:09 PM on Aug. 2, 2010

  • Out of control entitlement spending and the bursting of the dot com and housing bubbles.

    Answer by miriamz at 6:18 PM on Aug. 2, 2010

  • The mythical big evil corporations aren't what provides the jobs in this country--small businesses do. You aren't going to get jobs back until the govt takes themselves off the payrolls of the small businesses. I filed/payed my quarterly business and personal income taxes last week and I just wanted to bawl, it was so much money that I know will go right down the rathole. It will be even worse next year when I get hit by the end of the Bush tax cuts.

    Answer by yourspecialkid at 9:47 PM on Aug. 2, 2010

  • I also paid my quarterly taxes last week. I am well aware of how it works. I am glad that your business is making over $200,000. If you are good for you. If you aren't which is more likely then your taxes aren't going to change. You probably already got your tax break like my business did when I do payroll. Over 95% of small businesses will not be affected.


    Answer by mommom2000 at 10:42 PM on Aug. 2, 2010