Accounting For Growth In US Budget Deficit

This article does a nice job in showing the major factors that contributed to our growing budget deficits.  We have two basic problems: Tax revenue is down because of the Bush tax cuts and because of the recession and slow recovery.  Spending has also increased faster than plan, but spending growth has been primarily driven by defense spending.  There is a nice graph that shows the huge growth in defense spending.  Few of the budget hawks, however, want to cut the defense budget.

Going forward, growth in the healthcare budget is our biggest problem.  The growth is driven by price inflation and by demographics.  We can't do much about demographics, and neither party has a good plan for reducing price inflation.