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18th March
2009
written by Sean Noble

Politico.com has a story that is just downright depressing.  Our nation’s debt is about to hit $11 TRILLION.  That is a staggering sum.  It was half that size in 1996.  In 13 years we have added as much debt as it took us to accumulate in the more than 200 years prior.

Back when I was a budget associate in the U.S. House, I always went straight to the appendix of the President’s budget to look at a couple figures: Government spending as a percentage of GDP and deficit as a percentage of GDP.  Obviously, if the economy continues to grow, we can absorb some increases in government spending and debt.

For example, in FY 1983 federal spending was 23.5% of GDP.  That reflected both weak economic growth and increased defense spending by Reagan. The deficit was 6% of GDP (a post-WWII high).  By FY 1988 the percentage of federal spending was 21.3% and the deficit was 3.1%.

In Clinton’s first budget, FY 1994, the percentage of federal spending was 21% and the deficit was 2.9%.  The budget following the Republican take-over of Congress dropped to 20.3% and the deficit was 1.4%.

Bush’s budgets tended to be on par with Clinton’s budgets (as a percentage, remember) with the FY 2007 budget at 20% of GDP and the deficit at 1.2%

How does Obama’s first budget stack up?   Federal spending as a percentage of GDP will be a whopping 27.2%.  And the deficit as a percentage of GDP?  Buckle up… 8.3%, which shatters the previous high of 6% in 1983.  To make matters worse, that 8.3% is BEFORE taking into account the stimulus package passed earlier in the year.

This is ugly.

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2 Comments

  1. 18/03/2009

    I love how the Republicans can do no wrong. It was Reagan — NOT the Democratic led Congress. It was the Republican controlled congress — NOT Clinton. So who really owns the budget Sean — The Congress or the President? Or is it more spin to fit the message?

  2. Scott Gentry
    19/03/2009

    This not only is ugly but depressing. What can we as average, patriotic citizens who love America, do to let Washington know that we don’t like what is happeining? It seems as though there is a protectice bubble that insalates and prevents any of us (most of us)from getting through to Washington that we don’t like what they are doing? It reminds me of Eliot Ness’ “The Untouchables.”

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