Monday, October 19, 2009
United States in 1945
Friday’s news about the U.S. budget deficit was bad no matter how it was sliced. The final number for fiscal year 2009—$1.4 trillion—represented a 212% increase over the FY 2008 deficit of $455 billion. In comparison to the previous year, spending leaped 18.2%, while tax receipts fell 16.6%, with corporate tax receipts plunging 55%.
But the fact that the media really jumped on was the percentage of the gross domestic product that the deficit represented: 10%. Not since 1945 has a budget shortfall reached a double-digit percentage. As a general rule, economists recommend that a deficit not exceed 3% of GDP. President Barack Obama has promised to get the deficit down to the 3% level by the end of his first term.
-Noel Brinkerhoff
$1.4 Trillion Deficit Complicates Stimulus Plans (by Jackie Calmes, New York Times)
U.S. Deficit Biggest Since 1945 (by Jeanne Sahadi, CNNMoney.com)
Surpluses or Deficits as Percentages of GDP: 1930-2014 (Office of Management and Budget) (XLS)
Comments