White House and Congressional leaders will meet again today to once again come to an agreement to make headway against the federal deficit andl allow for the debt ceiling to be raised.  The sticking points, as always are over taxes and spending.  Daniel Thornton and Kevin Kliesen of the St. Louis Fed have a new Economic Synopsis in which they briefly compare debt today to past years.  And while it seems we can consider either lack or revenue or too much spending the culprit in years past, it is pretty clear to the authors that both are to blame now:

From 1950 through 1974, on average, revenues remained rela- tively constant at about 18 percent of GDP—averaging 17.6 percent of GDP for 1950-74 and 18.2 percent of GDP for 1975-2007. In contrast, expenditures were above their 1950-74 average level in all but 5 of the 38 years from 1970 through 2007: On average, expenditures increased from 18.3 percent of GDP for 1950-74 to 20.8 percent of GDP for 1975-2007. In short, the average deficit as a share of GDP rose 1.9 percentage points from 1950-74 to 1975-2007, which is more than accounted for by the same period’s 2.5-percentage-point increase in spending as a share of GDP.

Hence, the rise in the national debt from the 1970s through 2007 is entirely a consequence of the federal government’s increase of expenditures without an offsetting increase in revenues to pay for that additional spending.

If nominal GDP increases at the same rate as the debt, the debt-to-GDP ratio remains constant. For 1960-74, the deficits were relatively small and nominal GDP growth relatively rapid, so the debt-to-GDP ratio declined. In con- trast, for 1975-2007, the deficits were larger and nominal GDP growth slowed, nearly doubling the debt-to-GDP ratio.
As one might expect, the most recent experience is dif- ferent: The marked increase in the debt-to-GDP ratio during the past three years is a consequence of both an increase in expenditures and a reduction in revenue. Specifically, average expenditures increased to 23.2 percent of GDP while average revenue declined to 15.8 percent of GDP, which makes this contribution to the deficit about equally divided between increased expenditures and declining revenue.

Read The Federal Debt: Too Little Revenue or Too Much Spending? here.