Friday, April 15, 2016

Persistent U.S. Federal Budget Deficits

In various posts as well as seen in the "America's Trojan Horse" discussion, I have discussed various aspects of both the federal deficit and federal debt.  Both of these issues remain highly problematical in many ways.  At the same time, many aspects of the problems and their future implications lack recognition, either partially or fully.
One notable chart that I recently came across depicts, on a long-term basis, the level of the federal deficit as a percentage of GDP.  This chart is from the Peter G. Peterson Foundation, and is dated March 10, 2016:

(click on chart to enlarge image)
deficits as a percentage of GDP
I find the depiction above to be notable in many ways.  As one can see, prior to 1950 (substantial levels of) deficits corresponded with wartime periods, and many other periods showed budget surpluses.  Beginning at around 1950, deficits became not only commonplace but also increasingly larger as a percentage of GDP.
Also notable is that over (roughly) the last 15 years, the U.S. has been unwilling and/or unable to produce a federal budget surplus.
The Special Note summarizes my overall thoughts about our economic situation
SPX at 2082.78 as this post is written

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