Nancy Pelosi went on Fox News on Sunday and said that federal spending is not the primary cause of the deficit, lack of revenue is. “It is almost a false argument to say we have a spending problem. We have a budget deficit problem that we have to address,” she said. Jim Hoft at Gateway Pundit offers the predictable substance-free sneer.
He calls her statement “unreal” and says:
For the record… During Pelosi’s first year as Speaker in 2007 the deficit was $160 billion. The national deficit since then reached an all-time record of $1.4 Trillion after the failed stimulus and record spending by Democrats. This was more than eight times larger than what it was when Pelosi and Democrats took over in 2007. The deficit has been over a trillion dollars every year since Obama has been in office.
And for the record, Hoft is either clueless or dishonest here (or both). Deficits are the difference between two things: revenue and spending. The fact that we have a big deficit does not necessarily mean that we have too much spending, it could also mean we have too little revenue. And guess what? The facts show that our current budget problems are caused primarily by too little revenue, not too much spending. You can view all the data on federal revenue and layouts here.
In inflation-adjusted dollars, federal revenue went from $2.414 trillion in 2007 to $2.998 trillion in 2011 (2012 figures are just estimates at this point, so we’ll stick with confirmed numbers). Federal spending, on the other hand, has actually gone down since 2009, from $3.173 trillion to $3.126 trillion. So what happened in the meantime? The great recession hit in 2008, which depressed federal revenue enormously. As Politifact reported, the federal spending rate under Obama is the lowest of any post-war president. Indeed, under St. Ronald Reagan, federal spending went up five times faster than under Obama.
Nancy Pelosi is right, we have a revenue problem, not a spending problem. And the wingnuts, who like to pretend that the revenue side of the equation simply doesn’t exist, are, as usual, dead wrong.