Real GDP vs. Real GDP ex-deficit

This is my own twist on the size of deficit spending and what it means. By subtracting the GDP deflated deficit from the real GDP, you can see the huge gap being filled by current deficit spending. Some of the causes are well known: spending on unfunded wars and entitlements is too high, taxes are too low, and the Wall Street created financial crisis. Private and financial debt reached a saturation point in 2007 which was the trigger. What led consumers and financial firms to accumulate so much debt is more complex.

If you agree with the general causes, the solutions should be obvious. But what stands in the way is the political courage to address the issues leading me to name the difference in the lines the Political Fantasy Gap. The gulf between reality and sustainable government revenue is so large that the political body can't cope with it. Instead, the aim is to reduce the growth of the gap by 10% over the next 10 years. America is likely to run out of credit before then, which will be the crisis that forces the gap closed in an uncontrolled way.