US Budget Deficit History

The budget deficit is the difference between the money the 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‚   Adds to National Debt 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 Congressional Budget Office (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, the 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. Budget deficits eventually tapered back down into the billions by 2013. But in August 2019, the CBO predicted the deficit would again surpass $1 trillion in 2020—three years earlier than it had originally expected. Here is the actual and projected budget deficit or surplus by fiscal year, according to CBO data for modern history. 2029 - $1.4 trillion budget deficit (projected)2028 - $1.5 trillion budget deficit (projected)2027 - $1.3 trillion budget deficit (projected)2026 - $1.3 trillion budget deficit (projected)2025 - $1.3 trillion budget deficit (projected)2024 - $1.2 trillion budget deficit (projected)2023 - $1.2 trillion budget deficit (projected)2022 - $1.2 trillion budget deficit (projected)2021 -  $1 trillion budget deficit (projected)2020 - $1  trillion budget deficit (projected)2019 - $960  billion budget deficit (projected)2018 - $779  billion budget deficit2017 - $665  billion budget deficit2016 - $585  billion budget deficit2015 - $439  billion budget deficit2014 - $514 billion budget deficit2013 - $719 billion budget deficit2012 - $1.1 trillion budget deficit2011 - $1.3 trillion budget deficit2010 - $1.3 trillion budget deficit2009 - $1.4 trillion budget deficit2008 - $455 billion budget deficit2007 - $162 billion budget deficit2006 - $248.2 billion budget deficit2005 - $319 billi on budget deficit2004 - $412.7 billion budget deficit2003 - $377.6 billion budget deficit2002 - $157.8 billion budget deficit2001 - $128.2 billion budget surplus2000 - $236.2 billion budget surplus1999 - $125.6 billion budget surplus1998 - $69.3 billion budget surplus1997 - $21.9 billion budget deficit1996 - $107.4 billion budget deficit1995 - $164 billion budget deficit1994 - $203.2 billion budget deficit1993 - $255.1 billion budget deficit1992 - $290.3 billion budget deficit1991 - $269.2 billion budget deficit1990 - $221 billion budget deficit1989 - $152.6 billion budget deficit1988 - $155.2 billion budget deficit1987 - $149.7 billion budget deficit1986 - $221.2 billion budget deficit1985 - $212.3 billion budget deficit1984 - $185.4 billion budget deficit1983 - $207.8 billion budget deficit1982 - $128 billion budget deficit1981 - $79 billion budget deficit1980 - $73.8 billion budget deficit1979 - $40.7 billion budget deficit1978 - $59.2 billion budget deficit1977 - $53.7 billion b udget deficit1976 - $73.7 billion budget deficit1975 - $53.2 billion budget deficit1974 - $6.1 billion budget deficit1973 - $14.9 billion budget deficit1972 - $23.4 billion budget deficit1971 - $23 billion budget deficit1970 - $2.8 billion budget deficit1969 - $3.2 billion budget surplus Deficit as a Percent of GDP 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.