The U.S. Deficit as a Percentage of GDP

By Patricia L Johnson

The U.S. deficit has been a major topic of discussion, especially when it gets close to an election.  The opposing party has continually used the deficit as a topic of conversation to indicate how poorly the U.S. economy is doing.

Pictures always speak louder than words and my original intent was to prepare a chart to show how the deficit, as a percentage of GDP, which is the defining number,  has decreased continually over the past five-year period, but I found something better.

The non-partisan Congressional Budget Office (CBO) completed a report in April of 2014 which includes a chart showing this relationship.  Along with the chart the CBO made the following statement:

As it usually does each spring, CBO has updated the baseline budget projections that it released earlier in the year. CBO now estimates that if the current laws that govern federal taxes and spending do not change, the budget deficit in fiscal year 2014 will be $492 billion. Relative to the size of the economy, that deficit—at 2.8 percent of gross domestic product (GDP)—will be nearly a third less than the $680 billion shortfall in fiscal year 2013, which was equal to 4.1 percent of GDP. This will be the fifth consecutive year in which the deficit has declined as a share of GDP since peaking at 9.8 percent in 2009 (see the figure below).

2014 - 09-03-a

Since their April report was issued CBO updated their estimates on August 27, 2014 and are now projecting the deficit as a percentage of GDP to be 2.9 percent for 2014 rather than the 2.8 originally estimated.    Since CBO uses actual numbers for past years and projected numbers for the current year, the 2.9 percent could go up or down, but as it stands right now our deficit as a percentage of GDP has dropped a full 6.9 percent over the past five years as follows:

 

2014 - 09-03

Quite an achievement for this administration!

© 2014 Patricia L Johnson

 

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This entry was posted in Economy, Elections 2014, Government, News and politics and tagged , . Bookmark the permalink.

4 Responses to The U.S. Deficit as a Percentage of GDP

  1. The Columbus Dispatch, on their front page, recently went to great lengths to point out that while
    the deficit was decreasing, the debt was still increasing. That is not a joke–that’s just how stupid
    people are!

    • If this is the article you’re talking about, it looks like the Dispatch picked it up from McClatchy’s Washington Bureau http://www.pressdisplay.com/pressdisplay/viewer.aspx
      Have almost come to the conclusion that you could put everything the general public knows about politics, government, economy in a thimble and still have plenty of room left over. Not sure what the reason is – maybe there’s just too much out there, both real and false, they don’t understand and with each day that passes more is added. Difficult to keep up when you start out from behind the eight-ball.

      P.

  2. Seems to me we’ve written more than one article on the subject so it’s not our fault people don’t know the difference 🙂

    Have a good day.

  3. Rightt-wingers no longer talk about the deficit–it’s the national debt and how it has grown! The
    deficit is no longer a problem! People in general don’t know the difference.

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