Economic statistics show that revenue collections doubled during the 1980s following the Reagan tax cuts. Unfortunately, spending went up even more.

Deficits are caused when spending exceeds revenues, regardless of whether revenues are rising or falling. Whenever people decry tax cuts as causing deficits, I wonder if they ever consider the spending side of the equation. Federal spending has always been like a ratchet action - moving in one direction only (up) with no reverse permitted.

Federal spending has been growing far faster than the economy, the population, or damned near anything else, even when adjusted for constant dollars by factoring in inflation. As an example, according to this source (scroll down to see the numbers), the federal budget in 1970 was $195.6 billion. Factoring in inflation using the calculator available here, that works out to $923.05 billion in 2003. This week, Congress passed a budget outline for next year that's around $2.2 trillion, or about 2.4 times as high in real dollar terms as the 1970 budget.

Has our population increased since 1970? Sure, but not by a factor of 2.4.

Were people starving in the streets in 1970? Nope. I remember, I was there.

What was going on in 1970 that might affect the budget? Well, we were still involved in Vietnam. We were still sending men to the moon. We had all sorts of leftover welfare programs from LBJ's Great Society. This was about the time that the EPA was founded. OSHA too, if memory serves. Medicare had been founded a few years earlier, and if I'm not mistaken, we also had Medicaid.

So, why did spending increase so much so fast? Because revenues increased, and spending increased even faster as politicians from both sides rushed to buy votes by "bringing home the bacon."

If you're interested, you can see a lot more economic statistics for 1960 through 2000 at this source.