Generally speaking, the slight decline year over year is due to somewhat higher tax receipts (up $57 billion or 2.7%) and slightly less spending (down $64 billion or 1.8%).
Corporate tax revenue rose as did receipts from the Federal Reserve, which made money off its investments in housing and other areas of the economy. Individual income and payroll tax receipts were down year over year, the result of a continued high unemployment rate.
Overall government spending fell primarily because of declines in the costs of the Troubled Asset Relief Program, which just ended, and payments to mortgage giants Fannie Mae and Freddie Mac. The same is true for funds spent on federal deposit insurance.
Apart from those programs, other spending rose 5.5% because of increased outlays on Social Security, Medicare, Medicaid and unemployment benefits.
Meanwhile, the federal government in fiscal year 2010 paid $414 billion in interest on the country's cumulative debt acquired over the years.
There has been a lot of political hysteria expressed over the annual deficits of the past two years. Fiscal experts note, however, that the abnormally large deficits incurred in the wake of the financial crisis are not the primary source of the country's biggest fiscal problems.
The biggest source of fiscal concern remains the so-called structural deficit, which is made up primarily of spending on the big three entitlement programs. That structural deficit will continue to balloon faster than the economy grows long after the current downturn has ended.
Indeed, the Government Accountability Office projects that by the end of this decade, the vast majority of all federal tax revenue will be swallowed up by just four things: Interest payments on the country's debt, and the payment of Medicare, Medicaid and Social Security benefits.
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