Okay, its ridiculously big, but its actually not the biggest.
by Anonymous at 1/27/2004 10:30:00 AM
Since I am aware that some of you are all excited about the "Largest Deficit in History" I figured I would post a few links to Inflation adjusted charts and articles.
http://www.ombwatch.org/budget/pdf/deficits-071703.pdf
To quote from the above article:
The current $455 billion deficit is:
· the highest deficit in current dollar terms in history
· the highest deficit adjusted for inflation since WWII
· $1,561 per person
· 4.2% of GDP
Now since I know that everyone listening is higly educated, I will forgo explaining the importance of using inflation adjusted numbers and NOT the current dollar amount, to judge the size of a deficit. It is also important to consider the size of the tax base (population) and the size of the GNP as indicators as to really how big the thing is (it is far more complicated than a dollar amount unless your primary interest is a political slogan rather than the truth)
This second document DOES NOT have good numbers after 2002. However, it is useful for seeing the historical trends. Compare the above infomration to these charts to get an idea of where this deficit will put us as far as the historcial perspective.
http://oregonstate.edu/Dept/pol_sci/fac/sahr/sumbudg.pdf
Note that I am not trying to defend President Bush on this one. He is doing a lousy job of controlling Spending (but just in case anyone forgot, the President can only Propose and approve/veto budgets... Congress does the majority of the work in deciding what gets spent where, not the Administration) However, you will note that this is the largest Deficit since WWII. At the beginning of WWII the country was recovering from the worst economic situation it has ever encountered and fighting a war. We too are recovering from a recession (obviously nothing as sever as a depression) and fighting a war, so Deficit spending might be expected to some degree.
http://www.ombwatch.org/budget/pdf/deficits-071703.pdf
To quote from the above article:
The current $455 billion deficit is:
· the highest deficit in current dollar terms in history
· the highest deficit adjusted for inflation since WWII
· $1,561 per person
· 4.2% of GDP
Now since I know that everyone listening is higly educated, I will forgo explaining the importance of using inflation adjusted numbers and NOT the current dollar amount, to judge the size of a deficit. It is also important to consider the size of the tax base (population) and the size of the GNP as indicators as to really how big the thing is (it is far more complicated than a dollar amount unless your primary interest is a political slogan rather than the truth)
This second document DOES NOT have good numbers after 2002. However, it is useful for seeing the historical trends. Compare the above infomration to these charts to get an idea of where this deficit will put us as far as the historcial perspective.
http://oregonstate.edu/Dept/pol_sci/fac/sahr/sumbudg.pdf
Note that I am not trying to defend President Bush on this one. He is doing a lousy job of controlling Spending (but just in case anyone forgot, the President can only Propose and approve/veto budgets... Congress does the majority of the work in deciding what gets spent where, not the Administration) However, you will note that this is the largest Deficit since WWII. At the beginning of WWII the country was recovering from the worst economic situation it has ever encountered and fighting a war. We too are recovering from a recession (obviously nothing as sever as a depression) and fighting a war, so Deficit spending might be expected to some degree.
