Table 18.1 Table 18.1 Federal government de cits, 1970-2005 Total Total De cit( De cit(-) Fi ISCa or Surplus or Surplus Year (S billions) Percent of gDP 1970 0.3 1980 73.8 2.9 190 212.3 5.4 221.4 4.0 2000 236.4 2.4 2002 157.8 2005 73.0 0.6 *Projections SOURCE: Congressional Budget Of ce, The Economic and Budget Outlook: Fiscal Years 2004--2013, January 2003, pp. xvi, 148
Table 18.1
How Big is the Debt? Deficits have generally been the rule (although there was a surplus from 1998 to2001) Deficit(as fraction of GDP)was highest in mid-1980s
7 How Big is the Debt? • Deficits have generally been the rule (although there was a surplus from 1998 to 2001). • Deficit (as fraction of GDP) was highest in mid-1980s
How Big is the Debt? The debt at a given time is the sum of all past budget deficits Cumulative excess of past spending over past receipts When there is a deficit, debt goes up; when there is a surplus, debt goes down Debt is stock variable while deficit and surplus are flow variables
8 How Big is the Debt? • The debt at a given time is the sum of all past budget deficits. – Cumulative excess of past spending over past receipts. – When there is a deficit, debt goes up; when there is a surplus, debt goes down. – Debt is stock variable, while deficit and surplus are flow variables
How Big is the Debt? Federal debt at end of 2002 was $3,500,000000,000 That is, 3.5 trillion dollars
9 How Big is the Debt? • Federal debt at end of 2002 was: $3,500,000,000,000 • That is, 3.5 trillion dollars
How Big is the Debt? Putting the debt in perspective The $3.5 trillion debt was about 34 of gdP in 2002 It has always been a large share of current GDP See Table 18.2 Servicing the debt comprised 8.5% of federal outlays in 2002 10
10 How Big is the Debt? • Putting the debt in perspective – The $3.5 trillion debt was about 34% of GDP in 2002 – It has always been a large share of current GDP • See Table 18.2 • Servicing the debt comprised 8.5% of federal outlays in 2002