According to Think Progress, the federal budget deficit fell faster last year than in any year since the end of World War II -- a fact. The progressive propaganda blog however left out that because President Obama first doubled America's annual IOUs, deficits on an annual basis are still higher than any other fiscal year in history.
The good news is that part of the decline is being driven by higher tax revenue as the economy slowly recovers. “Growth in tax revenue from an improving economy accounted for much of the decline in the deficit,” Annie Lowrey at the New York Times reports. Tax revenue increased $234 billion over last year, reaching $2.8 trillion, growth of about 12.9 percent.
But austerity also played a big role. Part of the increase in tax revenue is also due to higher tax rates, including the lapse of the payroll tax cut. The deficit also fell thanks to depressed government spending. “Over the same period, total government spending barely grew, rising to $3.9 trillion, from $3.8 trillion a year earlier,” Lowrey notes. Federal budget outlays fell as a proportion of GDP from 22 percent to 20.8 percent. Since 2011, Congress has enacted $2.4 trillion in deficit reduction, nearly three-quarters of which has come from spending cuts. Government investment in long-term priorities has fallen below any level seen since World War II.
Think Progress has its history wrong. Even at the lower fiscal 2013 spending level, during each year of his presidency, Barack Obama has spent more than any other president in any other fiscal year in history.
The chart below shows the US Federal deficit by year since 2002 (Source, the White House):
Note: 2014 is an estimate
At first glance it seems that George Bush raised the deficit to over $1.4 trillion dollars in 2009 (see the double asterisk above) and Obama shrunk the deficit every year through 2013. However less than half the 2009 deficit can be blamed on George Bush. The U.S fiscal year runs from October-September. The president who is in office at the beginning of the fiscal year gets the credit or blame for that entire year's spending. As he was in office during October of 2008, George Bush gets the blame for the entire 2009 spending.
In February of 2009 the Democratic Party controlled Congress and the new Obama administration rammed through the stimulus bill. The entire bill for the stimulus ($830 billion) was allocated for the 2009 fiscal year. Thus Bush was assigned the stimulus spending even though it was an Obama bill.
If the deficits were meted out with the stimulus bill in mind the deficit by year by president would look like:
This past year was by no means "austerity" spending. In fact despite the higher tax revenue (which Think Progress concedes), the fiscal 2013 deficit is $100 billion dollars more than Bush's 2009 deficit and $230 billion dollars more than Bush's 2008 deficit.