A few things to bear in mind:
- As Glenn Reynolds notes, the war spending began in FY2002 for Afghanistan and FY2003 for Iraq. Also, the Bush-era tax rate reductions were fully implemented in FY2003, but probably had their full impact in FY2004. The combination pushed deficits higher, but the economic growth generated by the recovery produced lower deficits each of the next three fiscal years.
- The FY2007 budget was the last fully Republican budget, passed in 2006 before the midterm elections that gave Democrats control of Congress in January 2007.
- The FY2008 budget was the last one signed by a Republican President. In 2008 for the FY2009 budget, the Democratic majorities in Congress refused to produce a budget before the election and then passed a series of continuing resolutions that continued spending at FY2008 levels until Barack Obama signed the finalized FY2009 budget in March 2009. There is one exception to this, though; Bush signed TARP in October 2008, which added $700 billion dollars in spending (in two tranches) and contributed significantly to the big deficit in FY2009.
Deficits are, however, one side of the equation. Democrats argue that these massive (and sudden) budget imbalances are due to a revenue issue, specifically that the rich don’t pay their fair share in taxes. They want to raise revenues to put us back to the deficit levels of the Bush era.