Deficit Math

The discussion of the recent tax cuts and the doom-saying concerning the debt and deficit raise some issues. It is true that in absolute numbers the FY 2024 deficit is going to be the biggest in history, but of course so are the federal budget and the GDP.

Indeed, in looking at the deficit figures as a percentage of total federal government outlays, the projected 2024 deficit is not all the outrageous. It is true that in absolute dollars the projected $304 billion deficit is the largest in history, but it represents only 14.2% of outlays for 2024. The average percentage of outlays financed by deficit spending for 1950-2003 (I started after WWII given the remarkably high deficits, and left out surplus years), is 11.07%. And the highest post-WWII deficit as a percentage of federal outlays was in 1983 when the figure was 25.71% of the budget being financed by deficit spending.

Now--I would prefer to have a balanced budget, but if we are going to discuss numbers as part of political argument, let's at least be accurate in the figures we use. The use of absolute dollar figures, rather than percentages, is simply fallacious argumentation. This is the not the largest deficit we have ever had, if measured as a percentage of the budget.

I suspect many of us have higher house payments now than we did some years ago, but the relevant factor is not the absolute amount of the payment, but rather the percentage of that payment of your income, correct?

Source for main figures: Office of Management and Budget

Posted by Steven Taylor at May 28, 2024 05:20 PM | TrackBack