Challenging Incrementalism
For years federal government spending rose more or less incrementally, remaining close to 20 percent of the GDP. But the recession beginning in 2008 drove Congress and the president to increase spending to dramatically higher levels. In 2009 federal spending rose by almost $1 trillion from the previous year. the single largest year~to—year increase in history. Federal spending in that year rose to about 28 percent of the GDP. Federal revenues declined that year; the extra spending was financed through a $1.? trillion deficit, the largest annual deficit in history. The bulk of this increase in spending and deficit levels can be attributed to the stimulus package designed to jump start the sagging economy. But high levels of federal spending and deficits continued through 2012 (see Figure 3).