In my previous post, I used a graph to illustrate how state spending in Arizona hasn’t been cut enough, not only compared to actual revenue collections, but based on what prognosticators thought revenues would be. The point of my graph was to show how spending consistently outpaced revenues and to illustrate why the deficit in AZ ($1.7 billion) is as big as it is (even though spending has been reduced somewhat).
Paul Krugman, who runs Conscience of a Liberal blog for the NY Times, uses this graph to show that the reason the federal budget deficit is so large is not because federal spending has exploded, but because revenues collapsed.
Ok, great. Federal spending (blue line) continued to outpace revenues (red line) when times were good, and now that times are bad, federal spending only continued to grow as if the economy was humming along just fine.
The deficit would be far worse if Krugman had his way (which he admits). He has argued for a year that the Bush/Obama response to the economic meltdown was way too little and way too late. He continues to argue for lots more spending to get the economy moving again.
I suppose there’s some silver lining that the blue and red lines can be viewed on the same screen.