60 Years of Budget Deficits

by gradycarter

Public debt is a very fiery issue in politics. I recently received in email from the great folks at No Labels about budget deficits, which led me to an article about budget deficits since the early 1900s. Feel free to sign up for the No Labels email updates with Mark McKinnon, but also have fun with this article, or whatever you call it when you read about budget deficits.

*And by the way, it’s important to note the difference between national debt, and national budget deficits – the deficit is the amount of debt accrued in the year of discussion, while the debt is about the aggregate.

*The following is from a No Labels Email
BUDGET DETAILS: “The White House has proposed a $3.9 trillion budget package with familiar proposals and almost $1 trillion in new taxes over the next 10 years. The budget for the year that begins Oct. 1, 2014 would be roughly $350 billion more than the federal government is projected to spend this fiscal year, and the increase comes almost entirely from parts of the budget that aren’t set by Congress (Social Security payments, for example). The White House said its budget would produce a $564 billion deficit for the year that ends Sept. 30, 2014, which represents 3.1% of gross domestic product –and expects the deficit to fall to precrisis levels by 2018,” writes The Wall Street Journal. Our lawmakers need to create shared goals and work together on a budget deal: The Wall Street Journal: 2015 Budget: Eight Highlights From the White House Budget
DIFFICULTY REACHING A DEAL: “President Obama’s fiscal 2015 budget was immediately dismissed by congressional Republicans as a ‘campaign brochure’ providing massive increases in spending for Democratic programs while offsetting the costs with tax-loophole closures that Republicans have repeatedly insisted they will not accept,” write Catherine Hollander and Sarah Mimms. We need our leaders in government to work across the aisle and agree to a national strategic agenda and a budget deal: Catherine Hollander and Sarah Mimms for National Journal: Don’t Expect to See Obama’s Gigantic Wish List Become Law
BUDGET DEFICIT: “Obama’s budget proposal projects that the deficit will be 3.7 percent of GDP in 2014, a five-year low,” writes Christopher Ingraham and Kennedy Elliott. Take a look at this chart to see the federal deficits from the past 60 years. (article and chart posted below)
*Below is the article and budget deficits

Explore 60 years of budget deficits in one chart

When President Obama took office in 2009 at the height of the recession, the annual budget deficit came in at 10.1 percent of gross domestic product — a level not seen since the end of World War II. In the five years since, the budget deficit has been sliced more than half. New figures in Obama’s just-released budget put it at only 3.7 percent of GDP in 2014. Explore 60 years of deficits – and the occasional surplus – in the interactive chart below.

60 years of budget deficits

As the chart shows, the recent reduction of the deficit has come primarily due to spending cuts instead of revenue increases. Spending has shrunk 4.1 percentage points from 2009 to today, while revenue has grown only 2.2 percentage points in the same period. To put it another way, there have been nearly $2 in spending cuts for every $1 in revenue increases. On the surface, it would appear that Republicans won the budget wars. But you wouldn’t get that impression listening to the rhetoric coming from some quarters of the Republican base after the recent debt-ceiling fights.