According to the Congressional Budget Office (CBO), the United States’ deficit for fiscal 2009, which runs from October 1, 2008 to September 30, 2009, was about $1.4 trillion. A mere 3.2 percent of the Gross Domestic Product (GDP) in 2008, the deficit was a whopping 9.9 percent of GDP by the end of fiscal 2009. This is a 209 percent increase, $943 billion of additional deficit. It is even a 207 percent increase over the CBO’s September 2008 projections for the fiscal 2009 deficit.

This is the largest deficit, relative to the size of the economy, since 1945. In 1945, however, the country had just spent four years fighting a world war in two theaters and previous to the war had struggled with the Great Depression for a decade. It’s easy to understand why the deficit in 1945 was so large, but what’s the reason for the size of our current deficit?

In Washington, a common explanation is that the recession produced the deficit. To be sure, as the graph displays, the recession caused lower than expected tax revenue—$419 billion lower, in fact. The recession caused corporations to make less profit, and individuals to earn less income, which also meant less money for the government.

But the reality is that this deficit is largely the product of government spending, as spending makes up the bulk of the deficit. Indeed, $459 billion of the deficit came from spending decisions made in the years preceding 2009. In 2009, the government added an additional $592 billion to this previously projected deficit; $245 billion for the financial bailout and $347 billion on stimulus spending. The only piece of good news comes from the projected cost of the interest we have to pay on the debt. Lower-than-projected interest rates reduced this amount by $61 billion. However, overall, spending accounts for more than $1 trillion of the entire deficit.

Of course, many commentators and politicians say that much of this spending was needed to get us out of the recession. But it’s worth noting that a good deal of spending extends to areas far beyond the scope of stimulus. As Senator Tom Coburn (R-Oklahoma) noted in his October 15 newsletter, while everyone is busy talking about healthcare reform and the recession, the Senate recently approved a 16 percent increase for the Department of the Interior and the Environmental Protection Agency, including a 33 percent increase for the EPA. He writes:

“This bill allows federal agencies to spend over $260 million to buy more land when they already occupy one of every three acres in the entire nation and one out of every two acres in the West. These same agencies face a $13 billion to $19 billion maintenance backlog on existing federal lands that threaten the health and safety of visitors.”

Isn’t it time that Congress starts leading by example rather than abusing their spending powers? A $1.4 trillion deficit seems to suggest that, yes, it is time.

Veronique de Rugy is senior research fellow at the Mercatus Center.

FURTHER READING: De Rugy wrote “So How Is the Stimulus Working Out?” and “Making Bush Look Like a Piker,” which examines how Bush-era deficits stack up to President Obama’s. “Is This What Deregulation Looks Like?” shows how it is hard to argue that deregulation of the financial services industry was rampant in Washington when the spending on finance and banking regulatory agencies kept growing so fast.

Image by Darren Wamboldt/Bergman Group.