Return To Deficits PDF Download

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 In addition, when you exclude the social security surplus, the deficit is currently 5.7% of GDP and the second largest percentage since WWII (only the 1983 budget under Reagan had a larger deficit.) Scope of the Defi. [...] These percentages were calculated using the size of the budget deterioration from an earlier projection of the 2003 surplus, not the change from the actual 2000 surplus. [...] To the extent that the economic projections were overly optimistic in 2001 (as they turned out to be), the share of the deterioration due to economic factors is overstated. [...] Structural deficit In addition to budget estimates, the congressional budget office also calculates a "standardized" budget, which is the deficit that would have been in place if the economy were operating at its potential level.2 In 2002, the CBO estimated that of the $158 billion deficit for that year, $153 billion was the standardized deficit. [...] The current level of deficits will hopefully prove to be, in OMB director Bolten's words, "manageable." However, the persistence and the magnitude of the deficits, especially considering current and future needs that are going unmet, as well as the unprecedented dive from surplus to deficits, are a sign that the current administration is not acting in a responsible manner on tax and budget issues.