Back in 2008, the deficit was somewhere around $200 billion, until the bank bailout, which was reported at first to be a 1-time bailout of $800 billion. The next year, there was the Stimulus package, which was reported to be around the same cost.

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But those 2 years passed, and the federal deficit remains above a trillion. One might expect it to drop back down to pre-bailout levels in 2010, but that hasn't happened.

Why hasn't the deficit already gone back down. What's making it linger at close to the same level it was during the bailout?

  • Asked - politics.stackexchange.com/questions/1057/…
    – user4012
    Commented Feb 26, 2013 at 21:18
  • @DVK Well if so much of the bailout got payed back already, What's keeping the deficit so high, and if it's not about the bailout, than where did the change from 2008 come from? Commented Feb 26, 2013 at 21:23
  • Also be careful when thinking the deficit was around $200 billion in 2008. The Iraq and Afghanistan war budgets were not completely included in the official budget up to 2008 but have been since 2008. Which means whilst the official budget deficit may have been $200B in 2008, you should still add on the budgets for the 2 wars if you want to compare <2008 budgets to more recent budgets and if you want to compare the US debt/deficits before to 2008 to now.
    – sazr
    Commented Feb 27, 2013 at 4:59
  • @JakeM - an average budget for 2 wars is ~100B-150B yearly. Not a major impact on the current 1T figures, though definitely worth noting.
    – user4012
    Commented Feb 27, 2013 at 17:34
  • @SamIam - I expanded the asnwer with exact spending categories, if THAT was what you were after (not clear from the question)
    – user4012
    Commented Feb 27, 2013 at 19:02

2 Answers 2


Government spending, 2009 and on, surged (consistently and permanently above 3.5T every year, compared to 2-3T before 2008)). Revenue dropped (except for 2012) to slightly above 2T. Deficit = "revenue-spending", so yearly deficit obviously increased to above 1T.

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Source: http://www.usgovernmentspending.com/spending_chart_2002_2016USb_12s0li101lcn_G1fG2fG

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Please note that these figures did NOT include spending on wars in Iraq and Afghanistan, which would have pushed the spending as well as deficit up by ~$120-150B a year (The Pentagon's total allocation for war from 2001-2011 in current dollars was $1,208.1 based on CBO), so actual deficits would have been north of $300B yearly before 2008, not $200B, to compare apples to apples.

Now, if you are curious what drove the spending increases that helped along this high deficit, let's look at the #s behind the graphs below in 9 spending categories - although, the graphs should give a very good idea even without the tables.

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But here's the data, hopefully self explaining.

Most of the increase (NOT diminished at all) vs. 2008 was Welfare spending, followed by Seniors , then Defense, followed by Other (which was mostly high in 2009, likely due to TARP).

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P.S. On a side note, as I figured out here, despite the $800B figure for TARP, in reality it was just over $400B, and all but $17-18B of it was paid back to the Treasury by 2013.

  • Related: politics.stackexchange.com/questions/1066/…
    – user4012
    Commented Feb 27, 2013 at 19:44
  • 1
    Thank you for your concise & precise answer. It explains why entitlements & defense spending are truly causing the deficits.
    – Osa E
    Commented Feb 27, 2013 at 20:12
  • 2
    I would note that "Welfare" includes costs for medicare, and Social security. Previously we have also had a surplus from SS deposits but since 2008 it has been putting out more than it takes in so that has been a big part of the jump there. Commented Feb 28, 2013 at 21:25

The comment above regarding expenditures on defense and welfare causing the deficit to me seem somewhat myopic. The rate of employment by the federal government in new departments and expanded employment overall are major contributors. The benefits package offered by the federal government are far more enriched than even most private employers. Basic payroll for federal employees along with taxes and cost of benefits have never been published in any of these reports that I've seen. I would be very interested to see the cost of the budget including these items: basic payroll, taxes (federal, state, local), benefits of the administrative side of government.

  • 2
    Taxes aren't a cost, they're factored into revenue. Payroll for departments is part of the budget for that department. You don't normally break it out as a thing, because what's generally more important is what area money is being spent in, and so it's more common to group the salary of an FAA air traffic controller in NYC with the electric bill in the control tower, not with the salary of a janitor in Kansas.
    – cpast
    Commented Jan 3, 2015 at 23:42

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