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Deficits
101
Brian
Trumbore
President/Editor, StocksandNews.com
The following is but one way of looking
at the fiscal health of the United States Government.
I offer it without political opinion.
The
Public Debt
Q:
What is the difference between the debt and the deficit?
A:
The deficit is the fiscal year difference between
what the United States Government (Government) takes
in from taxes and other revenues, called receipts,
and the amount of money the Government spends, called
outlays. The items included in the deficit are considered
either on-budget or off-budget. [The off- budget items
are typically comprised of the two Social Security
trust funds?and other insurance programs.] Generally,
on- budget outlays tend to exceed on-budget receipts,
while off- budget receipts tend to exceed off-budget
outlays.
You
can think of the total debt as accumulated deficits
plus accumulated off-budget surpluses. The on-budget
deficits require the Treasury to borrow money to raise
cash needed to keep the Government operating. We borrow
the money by selling Treasury securities like T-bills,
notes, bonds and savings bonds to the public. Additionally,
the Government Trust Funds are required by law to
invest accumulated surpluses in Treasury securities.
The Treasury securities issued to the public and to
the Government Trust Funds (Intragovernmental Holdings)
then become part of the total debt.
Total
Public Debt as of 5/17/2006?$8,337,013,432,029
4/28/06?$8.355
trillion
3/31/06?.8.371
2/28/06?.8.269
1/31/06?.8.196
12/30/05...8.170
9/30/05?.7.932
9/30/04?.7.379
9/30/03?.6.783
9/30/02?.6.228
9/30/01?.5.807
9/30/00?.5.674
9/30/99?.5.656
9/30/98?.5.526
9/30/97?.5.413
9/30/96?.5.224
9/30/95?.4.973
9/30/94?.4.692
9/30/93?.4.411
9/30/92?.4.064
9/30/91?.3.665
9/30/90?.3.233
9/30/89?.2.857
9/30/88?.2.602
9/30/87?.2.350
9/30/86?.2.125
12/31/85...1.945
12/31/84...1.662
12/31/83...1.410
12/31/82...1.197
12/31/81...1.028
12/31/80?0.930
12/31/79?0.845
12/31/78?0.789
12/31/77?0.718
12/31/76?0.653
12/31/75?0.576
12/31/74?0.492
12/31/73?0.469
12/31/72?0.449
12/31/71?0.424
12/31/70?0.389
12/31/69?0.368
12/31/68?0.358
12/31/67?0.344
12/31/66?0.329
12/31/65?0.320
12/31/64?0.317
12/31/63?0.309
12/31/62?0.303
12/31/61?0.296
12/31/60?0.290
12/31/59?0.290
12/31/58?0.282
12/31/57?0.274
12/31/56?0.276
12/31/55?0.280
12/31/54?0.278
12/31/53?0.275
6/30/53?..0.266
6/30/52?..0.259
6/30/51?..0.255
6/30/50?..0.257
Notes:
I took slight liberties with the dates, i.e., 6/29
or 9/29 in some years is stated as 6/30 or 9/30 just
for ease of viewing. Also the definition of the fiscal
year changed as you can see.
The
total size of the U.S. economy is $13.020 trillion
(as of 3/31/06), which means that the total public
debt is 64% of GDP, one common way of looking at the
debt. This is a historically high level.
The
other way is to look at the size of the fiscal budget
deficit vs. GDP, and if you assume a 2006 (fiscal
year 9/30) deficit of $350 billion (the White House
originally projected it at $423 billion, though now
experts peg it anywhere from $300 billion to $350
billion thanks to continued growth in receipts), it
is thus 2.6- 2.7% of GDP, or just slightly higher
than the 40-year average of 2.3%.
But,
any deficits are continually adding to the total public
debt and the interest expense on same is huge; anywhere
from $211 billion to $350 billion depending on what
categories you include. Plus, as you are well aware,
the public debt is about to explode further as the
Baby Boomers retire and entitlements such as Social
Security and Medicare gain steam.
Sources:
Bureau
of the Public Debt
U.S. Treasury Dept.
Office of Management and Budget
Bureau of Economic Analysis
Wall
Street History returns next week.
Brian
Trumbore
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