Runaway Spending, Not Inadequate Tax Revenue, Is Responsible for Future Deficits

Everyone wants to know more about the budget and here is some key information with a chart from the Heritage Foundation and a video from the Cato Institute.

The main driver behind long-term deficits is government spending—not low revenues. While revenue will surpass its historical average of 18.0 percent of GDP by 2021, spending will shoot past its historical average of 20.3 percent, reaching 26.4 percent in the same year.

PERCENTAGE OF GDP

Source: Heritage Foundation calculations based on Congressional Budget Office data.

In Depth

• Policy Papers for Researchers

  • FACTSHEET ON APRIL 15, 2011Taxes Are Not Too Low: It’s the Spending, Stupid
  • WEBMEMO ON AUGUST 19, 2010New CBO Budget Baseline Shows that Soaring Spending – Not Falling Revenues – Risks Drowning America in Debt

• Technical Notes

  The charts in this book are based primarily on data available as of March 2011 from the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO). The charts using OMB data display the historical growth of the federal government to 2010 while the charts using CBO data display both historical and projected growth from as early as 1940 to 2084. Projections based on OMB data are taken from the White House Fiscal Year 2012 budget. The charts provide data on an annual basis except… Read More

• Authors

  Emily GoffResearch Assistant
  Thomas A. Roe Institute for Economic Policy StudiesKathryn NixPolicy Analyst
  Center for Health Policy StudiesJohn FlemingSenior Data Graphics Editor