Where Do Budget Deficits Come From?

Budget deficits are really simple to understand.  They are the difference between federal spending and tax receipts.  Consequently, they can result from lower tax receipts and/or from spending in excess of tax receipts.  The budget surpluses in the Clinton administration were due to fiscal policy, and from economic growth which increased tax receipts.  Clinton's fiscal policy included tax increases and spending cuts.  Fiscal policy was just the opposite in Bush administration.  Bush cut taxes and increased spending.  Clinton's budget surplus was quickly turned into large budget deficits.  The huge budget deficits in the Obama administration are largely the result of sharp drop in tax receipts, due to recession, and a rapid increase in government spending, largely the result of mandatory spending invoked by high unemployment.  Federal spending, under Obama, has actually declined as the economy has slowly recovered and reduced mandatory spending.