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Biggest Deficit in History? Yes and No

Half a trillion dollars is the most ever, but several others have been
worse relative to the size of the economy.

February 27, 2004

Modified: February 27, 2004

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Summary



Kerry said Feb. 26 that Bush?s budget deficit is ?the largest in
history.? But by the most important measure that?s not quite true.

This year the deficit is projected to be in the neighborhood of half a
trillion dollars, a record. That?s 4.5% of the entire economy, a figure
large enough to worry Alan Greenspan and others concerned about a drag
on future economic growth. But it was even higher in both the Reagan
administration and in the term of Bush's father.


Analysis



The federal deficit for fiscal year 2004 (which ends Sept. 30) is
projected by the President?s Office of Management and Budget
http://www.whitehouse.gov/omb/budget/fy2005/sheets/hist01z3.xls to be
$521 billion. The Congressional Budget Office
http://www.cbo.gov/showdoc.cfm@index=5003&sequence=0 is predicting a
somewhat lower total of $477 billion. But either would easily exceed the
previous record deficit of $375 billion set last year. That in turn
broke the previous record of $290 billion, which was reached under
Bush?s father in 1992.







*Bush in red: Clinton in dark blue*

Source: Table 1.3
http://www.whitehouse.gov/omb/budget/fy2005/sheets/hist01z3.xls Budget
of the United States Government: Fiscal Year 2005 Historical Tables



But the most important measure of the deficit is not the size in
dollars, or even the size in dollars after adjusting for inflation. The
most important measure is the size relative to the nation?s economic
output, what economists call Gross Domestic Product or GDP. And in fact,
the current projected deficit was equaled or exceeded in four years
during the Reagan administration and two years in the term of Bush?s father.

Source: Table 1.3
http://www.whitehouse.gov/omb/budget/fy2005/sheets/hist01z3.xls Budget
of the United States Government: Fiscal Year 2005 Historical Tables



Still, there's little question that the deficit is far too big by any
measure. President Bush himself admits as much, and is promsing to
cut the deficit in half within two years. And on Feb. 25 Federal Reserve
Chairman Alan Greenspan
http://www.federalreserve.gov/boarddocs/testimony/2004/20040225/default.htm
said he feared deficits are again becoming chronic, and threatening to
drag down economic growth in the future.

Footnote: The biggest deficits by far -- measured as a percentage of the
economy -- came during World War II. In 1943 the deficit was $54.3
billion -- which today would amount to little more than rounding error.
But back then it amounted to more than 30% of the wartime economy.
Nothing since the war years has come close.


Sources



_Budget Of The United States Government: Fiscal Year 2005_ Historical
Tables "Table 1.3
http://www.whitehouse.gov/omb/budget/fy2005/sheets/hist01z3.xls
?Summary Of Receipts, Outlays, And Surpluses Or Deficits (?) In Current
Dollars, Constant (FY 2000) Dollars, And As Percentages Of GDP:
1940?2009" Jan 2004.

US Congress, Congressional Budget Office ?Monthly Budget Review
http://www.cbo.gov/showdoc.cfm@index=5003&sequence=0 ? 6 Feb 2004.







Copyright 2004 Annenberg Public Policy Center of the University of
Pennsylvania

On Mon, 11 Oct 2004 01:53:54 GMT, "Michael McKelvy"
wrote:


Kerry said Feb. 26 that Bush?s budget deficit is ?the largest in
history.? But by the most important measure that?s not quite true.

This year the deficit is projected to be in the neighborhood of half a
trillion dollars, a record. That?s 4.5% of the entire economy, a figure
large enough to worry Alan Greenspan and others concerned about a drag
on future economic growth. But it was even higher in both the Reagan
administration and in the term of Bush's father.

Yep. Typical Republican "big government".

"dave weil" wrote in message
...
On Mon, 11 Oct 2004 01:53:54 GMT, "Michael McKelvy"
wrote:


Kerry said Feb. 26 that Bush?s budget deficit is ?the largest in
history.? But by the most important measure that?s not quite true.

This year the deficit is projected to be in the neighborhood of half a
trillion dollars, a record. That?s 4.5% of the entire economy, a figure
large enough to worry Alan Greenspan and others concerned about a drag
on future economic growth. But it was even higher in both the Reagan
administration and in the term of Bush's father.

Yep. Typical Republican "big government".

Both the GOP and the Dems spend to much money on things we don't need
government to do. That's why I don't vote for either of them.

Michael McKelvy wrote:

Kerry said Feb. 26 that Bush?s budget deficit is ?the largest in
history.? But by the most important measure that?s not quite true.

This year the deficit is projected to be in the neighborhood of half a
trillion dollars, a record. That?s 4.5% of the entire economy, a figure
large enough to worry Alan Greenspan and others concerned about a drag
on future economic growth. But it was even higher in both the Reagan
administration and in the term of Bush's father.

Eh McKelvy, considering that you cannot answer honestly to a simple
question how can you handle all the above interrogation points ?
;-)

"Lionel" wrote in message
...
Michael McKelvy wrote:

Kerry said Feb. 26 that Bush?s budget deficit is ?the largest in
history.? But by the most important measure that?s not quite true.

This year the deficit is projected to be in the neighborhood of half a
trillion dollars, a record. That?s 4.5% of the entire economy, a figure
large enough to worry Alan Greenspan and others concerned about a drag
on future economic growth. But it was even higher in both the Reagan
administration and in the term of Bush's father.

Eh McKelvy, considering that you cannot answer honestly to a simple
question how can you handle all the above interrogation points ?
;-)

The pot calling the kettle black.

What question are you talking about?

Michael McKelvy wrote:


"Lionel" wrote in message
...
Michael McKelvy wrote:

Kerry said Feb. 26 that Bush?s budget deficit is ?the largest in
history.? But by the most important measure that?s not quite true.

This year the deficit is projected to be in the neighborhood of half a
trillion dollars, a record. That?s 4.5% of the entire economy, a figure
large enough to worry Alan Greenspan and others concerned about a drag
on future economic growth. But it was even higher in both the Reagan
administration and in the term of Bush's father.

Eh McKelvy, considering that you cannot answer honestly to a simple
question how can you handle all the above interrogation points ?
;-)

The pot calling the kettle black.

What question are you talking about?

LOL !

"Lionel" wrote in message
...
Michael McKelvy wrote:


"Lionel" wrote in message
...
Michael McKelvy wrote:

Kerry said Feb. 26 that Bush?s budget deficit is ?the largest in
history.? But by the most important measure that?s not quite true.

This year the deficit is projected to be in the neighborhood of half a
trillion dollars, a record. That?s 4.5% of the entire economy, a figure
large enough to worry Alan Greenspan and others concerned about a drag
on future economic growth. But it was even higher in both the Reagan
administration and in the term of Bush's father.

Eh McKelvy, considering that you cannot answer honestly to a simple
question how can you handle all the above interrogation points ?
;-)

The pot calling the kettle black.

What question are you talking about?

LOL !

Refusal to answer noted.

Michael McKelvy wrote:


"Lionel" wrote in message
...
Michael McKelvy wrote:


"Lionel" wrote in message
...
Michael McKelvy wrote:

Kerry said Feb. 26 that Bush?s budget deficit is ?the largest in
history.? But by the most important measure that?s not quite true.

This year the deficit is projected to be in the neighborhood of half a
trillion dollars, a record. That?s 4.5% of the entire economy, a
figure large enough to worry Alan Greenspan and others concerned about
a drag on future economic growth. But it was even higher in both the
Reagan administration and in the term of Bush's father.

Eh McKelvy, considering that you cannot answer honestly to a simple
question how can you handle all the above interrogation points ?
;-)

The pot calling the kettle black.

What question are you talking about?

LOL !

Refusal to answer noted.

This is my answer :

:-D