The Federal Budget for Fiscal Year 2010 has been out for awhile. We continue the tradition (because we've done it thrice before, in 2005, 2007, and 2008) of producing some simple graphs from the tables provided.
It's a little more depressing this year.
(Remember: at Pun Salad, all puns are intended.)
Kvetch: The Office of Management and Budget used to provide a "Historical Tables" standalone document that showed how the new budget numbers fit into historical context. As near as I can tell, they haven't generated that document this year. Jerks. So I've taken last year's document and replaced/appended data for current/future years from Table S-1 in the new document here.
So, without further ado, here's a graph of Federal receipts and outlays since 1977, expressed as percent of GDP; post-2008 numbers are estimates:
Here's what that works out to in terms of deficit spending:
Click on the graphs for their fullsize versions. Data is here and my Gnuplot script is here. If you'd like to see the data extended back to 1930: here's the receipt/outlays graph and here's the deficit graph.
Standard disclaimer: if you're thinking this is simple-minded, you're right. In my defense, the percent-of-GDP seems appropriate for historical comparison; it seems to be (arguably) a good measure of what we can "afford"; and, if you believe deficits "damage the economy", then it's a pretty good proxy for the level of damage.
There is, of course, a stunning difference between the numbers produced last year and the ones this year. Most striking are the numbers for FY2009:
Outlays predicted to be 27.7% of GDP, the highest since 1945;
Receipts predicted to be 15.4% of GDP, the lowest since 1950;
… which gives us a deficit of 12.3% of GDP, also the biggest
That speaks for itself, and explains why you've been seeing the phrase "uncharted territory" coming up so much in economic news.
Some other random comments and URLs:
Last year's budget (and the one before that) predicted a modest
surplus in FY2012 and FY2013. In contrast, the new budget
predicts deficits in the neighborhood of 3% of GDP in FY2012 until
FY2019 (and, probably, as far as the eye can see).
Before you say "Hey, once we get past 2009, it's not as bad as I
thought," you should read Greg Mankiw on the Rosy
Scenario that the Obama Administration relied upon for these
projections: numbers for GDP growth pretty far out of whack from
Robert Samuelson is not as polite as Professor Mankiw:
Obama is a great pretender. He repeatedly says he's doing things that he isn't, trusting his powerful rhetoric to obscure the difference. He has made "responsibility" a personal theme; the budget's cover line is "A New Era of Responsibility." He says the budget begins "making the tough choices necessary to restore fiscal discipline." It doesn't.You should really read the whole thing.
With today's depressed economy, big deficits are unavoidable for some years. But let's assume that Obama wins re-election. By his last year, 2016, the economy presumably will have long recovered. What does his final budget look like? Well, it runs a $637 billion deficit, equal to 3.2 percent of the economy (gross domestic product), projects Obama's Office of Management and Budget. That would match Ronald Reagan's last deficit, 3.1 percent of GDP in 1988, so fiercely criticized by Democrats.