US Budget Deficit History

US Budget Deficit History The budget deficit is the difference between the money federal government takes in, called receipts, and what it spends, called outlays  each year. The U.S. government has run a multibillion-dollar deficit almost every year in modern history, spending much more than it takes in. The opposite of a budget deficit, a budget surplus occurs when the government’s revenue exceeds current expenditures resulting in an excess of money that can be used as needed. In fact, the government has recorded budget  surpluses in only five years since 1969, most of them under Democratic President Bill Clinton.   In all-too-rare times when revenue equals spending, the budget is called â€Å"balanced.†Ã‚   [  Debt Ceiling History  ] Running a budget deficit adds to the national debt and, in the past, has forced Congress to increase the debt ceiling under numerous presidential administrations, both Republican and Democrat, to allow the government to meet its statutory obligations. Although federal deficits have shrunk markedly in recent years, the CBO projects that under current law increased spending for Social Security and major health care programs, like Medicare, along with increasing interest costs will cause the national debt to rise steadily over the long term. The larger deficits would cause federal debt to grow faster than the economy. By 2040, CBO projects, the national debt will be more than 100% of the nation’s Gross Domestic Product (GDP) and continue on an upward path – â€Å"a trend that cannot be sustained indefinitely,† notes the CBO.   Notice particularly the sudden jump in the deficit from $162 billion in 2007, to $1.4 trillion in 2009. This increase was due primarily to spending for special, temporary government programs intended to re-stimulate the economy during the great recession of that period. Here is the actual and projected budget deficit or surplus by fiscal year, according to Congressional Budget Office data for modern history. 2021 -  $916 billion budget deficit (projected)2020 - $987  billion budget deficit (projected)2019 - $984  billion budget deficit (projected)2018 - $833  billion budget deficit (projected)2017 - $665  billion budget deficit2016 - $585  billion budget deficit2015 - $439  billion budget deficit2014 - $514 billion budget deficit2013 - $719 billion budget deficit 2012 - $1.1 trillion budget deficit 2011 - $1.3 trillion budget deficit 2010 - $1.3 trillion budget deficit 2009 - $1.4 trillion budget deficit 2008 - $455 billion budget deficit 2007 - $162 billion budget deficit 2006 - $248.2 billion budget deficit 2005 - $319 billion budget deficit 2004 - $412.7 billion budget deficit 2003 - $377.6 billion budget deficit 2002 - $157.8 billion budget deficit 2001 - $128.2 billion budget surplus 2000 - $236.2 billion budget surplus 1999 - $125.6 billion budget surplus 1998 - $69.3 billion budget surplus 1997 - $21.9 billion budget deficit 1996 - $107.4 billion budget deficit 1995 - $164 billion budget deficit 1994 - $203.2 billion budget deficit 1993 - $255.1 billion budget deficit 1992 - $290.3 billion budget deficit 1991 - $269.2 billion budget deficit 1990 - $221 billion budget deficit 1989 - $152.6 billion budget deficit 1988 - $155.2 billion budget deficit 1987 - $149.7 billion budget deficit 1986 - $221.2 billion budget deficit 1985 - $212.3 billion budget deficit 1984 - $185.4 billion budget deficit 1983 - $207.8 billion budget deficit 1982 - $128 billion budget deficit 1981 - $79 billion budget deficit 1980 - $73.8 billion budget deficit 1979 - $40.7 billion budget deficit 1978 - $59.2 billion budget deficit 1977 - $53.7 billion budget deficit 1976 - $73.7 billion budget deficit 1975 - $53.2 billion budget deficit 1974 - $6.1 billion budget deficit 1973 - $14.9 billion budget deficit 1972 - $23.4 billion budget deficit 1971 - $23 billion budget deficit 1970 - $2.8 billion budget deficit 1969 - $3.2 billion budget surplus Looking at the Deficit as a Percent of GDP In order to put the federal deficit into proper perspective, it must be viewed in terms of the government’s ability to pay it back. Economists do this by comparing the deficit to Gross Domestic Product (GDP)- the measure of the overall size and strength of the U.S. economy. This â€Å"debt-to-GDP ratio† is a ratio between the cumulative government debt and the GDP over time. A low debt-to-GDP ratio indicates that the nation’s economy is producing and selling enough goods and services to pay back the federal deficit without incurring further debt. In simple terms, a larger economy can sustain a larger budget, and thus a larger budget deficit. According to the Senate Budget Committee, in the fiscal year 2017, the federal deficit was 3.4% of GDP. For the fiscal year 2018, when the U.S. government operated under its largest budget in history, the deficit was estimated to be 4.2% of GDP.   Remember, the lower the debt-to-GDP percentage, the better. Clearly, the more you spend, the harder it is to pay back your debts.