Why has the United States run a Federal budget deficit for the majority of the last 80 yearsWhy has the United States run a Federal budget deficit for the majority of the last 80 years

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brettd's profile pic

brettd | High School Teacher | (Level 2) Educator Emeritus

Posted on

In addition, the United States has perpetually been in "crisis", whether it was manufactured or real, since the Great Depression.  Armed with Keynesian economic arguments, politicians found it easier to spend their way out of these issues perpetually.  The Depression, then World War II, then a very long and protracted Cold War, then the current economic recession and debt crisis have all led to increased deficit spending.  For the most part, voters have forgiven them for it, until very recently.

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accessteacher | High School Teacher | (Level 3) Distinguished Educator

Posted on

I think we can add to the excellent ideas of #2 the immense pressure there is on governments and administrations to achieve "growth" and to continue investing in a wide range of causes. Because the USA has perhaps one of the biggest economies in the world, it is more than able to take out massive loans that ensure it can continue to present an image of strong and robust growth.

pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

This is really a matter of opinion more than of fact -- the only fact involved is that it is because the government spends more than it takes in.  But why does it do that?

To me, the best answer is because there is not really an incentive for it to spend less.  Or at least there has not been much of an incentive to do that so far.  At the same time, there is a major incentive to spend money.

Every time the government spends money, it makes someone happy.  If the government builds a "bridge to nowhere," the construction company that built it is happy and the Congressperson from that district can claim they "bring home the bacon."  So there is an incentive to spend.

But there is no incentive to spend less.  If the government spends less money, who gains?  Each taxpayer gains a tiny little bit of money, but not enough to matter to them.

Because of this, there is a huge incentive to spend and very little incentive to stop spending.

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