Interesting budget comparisons and predictions by CBO

[bpwallace49]

By CHRISTOPHER S. RUGABER, AP Economics Writer Christopher S. Rugaber, Ap Economics Writer – Fri Oct 16, 6:49 pm ET

WASHINGTON – The federal government's budget gap is huge — but by some measures, it's been bigger in the past.

 

The annual budget deficit reached $1.4 trillion in fiscal year 2009, the Obama administration said Friday, a record sum by far in dollar terms. It's the result of both a huge jump in spending and a sharp drop in tax revenue.

 

In effect, the federal government went on a spending binge at the same time it received a sharp pay cut.

 

And if, like an overextended consumer, Washington doesn't mend its ways, it will pay more and more in interest. Interest payments could balloon to $799 billion in 2019 from $191 billion in 2009, according to an estimate by the nonpartisan Congressional Budget Office.

 

The budget gap reached 10 percent of gross domestic product in fiscal 2009, which ended Sept. 30. GDP is the broadest measure of the economy's output.

 

That's the largest proportion since World War II, when it was much higher. The 1943 deficit, for example, equaled 30.3 percent of the economy.

 

The total national debt is projected to worsen over the next decade unless major changes are made to tax and budget policies. According to the CBO, publicly held national debt — which represents the accumulation of annual deficits — would reach 81.7 percent of the economy by 2019, from about 51 percent in fiscal 2009. Still, that's below the record of 113 percent in 1945.

 

That level of debt could drive interest rates higher as Uncle Sam struggles to finance the flood of red ink.

 

Friday's announcement raises other questions. Here are some answers.

 

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DEFICITS, DEFICITS:

 

$459 billion: 2008 deficit

 

$1.4 trillion: 2009 deficit, highest on record

 

$1.4 trillion: 2010 deficit (Projection by Congressional Budget Office)

 

$974 billion: 2011 deficit (projected)

 

$633 billion: 2012 deficit (projected)

 

$1.2 trillion: 2019 deficit (projected)

 

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BIGGEST DEFICITS AS PERCENTAGE OF GDP, SINCE 1940:

 

10 percent: 2009 deficit

 

3.2 percent: 2008 deficit

 

6 percent: 1983 deficit

 

21.5 percent: 1945 deficit

 

30.3 percent: 1943 deficit

 

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WHEN HAS THE NATION RUN A SURPLUS?

 

12: Number of years since 1940 the United States has run a budget surplus

 

28: Number of years the budget was in deficit, 1970-1997

 

4: Number of years the budget was in surplus, 1998-2001

 

$70 million: Cumulative U.S. surplus from 1789-1849

 

$1 billion: Cumulative U.S. debt from 1850-1900

 

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NATIONAL DEBT, HIGHS AND LOWS:

 

29.6 percent: National debt — the total of annual deficits — as a percentage of GDP in 1790

 

2.7 percent: Debt as percentage of GDP in 1916, lowest since 1900

 

33.4 percent: Debt as percentage of GDP in 1919, after World War I

 

112.7 percent: Debt in 1945

 

24.6 percent: Debt in 1974, a postwar low

 

51 percent: National debt as percentage of GDP, 2009

 

81.7 percent: National debt by 2019 (CBO estimate)

 

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NATIONAL DEBT TO GDP (All figures for 2008):

 

40.8 percent: United States

 

90.2 percent: Belgium

 

107.9 percent: Greece

 

60.6 percent: UK

 

54.2 percent: France

 

38.9 percent: Germany

 

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MAKE LESS, SPEND MORE:

 

$419 billion: Drop in federal taxes and other revenue from 2008 to 2009

 

$543 billion: Increase in spending from 2008 to 2009

 

$2.1 trillion: Federal revenue in 2009

 

$3.5 trillion: Federal spending in 2009

 

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PAYING THE PIPER:

 

$253 billion: Interest paid by government, 2008

 

$191 billion: Interest in 2009

 

$799 billion: Projected interest, 2019

 

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INTEREST COSTS COMPARED for 2009:

 

4.7 percent: Interest as a proportion of federal spending

 

18.1 percent: Military's proportion of spending

 

11.6 percent: Medicare's proportion

 

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INTEREST COSTS COMPARED for 2019 (White House projections):

 

14.6 percent: Interest

 

13.5 percent: Military

 

16.4 percent: Medicare

[WaterMan]

WHEN HAS THE NATION RUN A SURPLUS?

 

12: Number of years since 1940 the United States has run a budget surplus

 

28: Number of years the budget was in deficit, 1970-1997

 

4: Number of years the budget was in surplus, 1998-2001

 

$70 million: Cumulative U.S. surplus from 1789-1849

 

$1 billion: Cumulative U.S. debt from 1850-1900

 

 

Interesting.

[AtomicCEO]

Interesting.

 

Everything changed on 9/11.

Until Obama was elected, then it all suddenly changed back.