Thursday, March 20, 2008

U.S. Budget Figures

Many Americans do not understand the National Debt versus the Budget Deficit. The National Debt is the total amount of debt the U.S. has at any given time. The Budget Deficit is the shortfall the U.S. Government has in any given year. If there is a deficit it means that the government spent more money than it took in.

Think about it like this. If you have a $500,000 mortgage, your total debt would be $500,000. But in a given year, you only have to pay for that year's payments. If you could not make all of the payments that year, you would have a deficit in your household budget. When the government does not have enough money to pay all of its bills in a given year, it has a deficit.

The non-partisan Congressional Budget Office (CBO) reports real economic figures. If you look at Table 1 of the CBO link, in the column that is second from the right, you can see the total annual budget deficits (and surpluses) of the U.S. Government. Here are the figures:

1992: -$290.3 billion (deficit)
2000: $236.2 billion (surplus)
2007: -$162.0 billion (deficit)

With the slowing economy, the current deficit for 2008 looks to be over $400 billion. It will likely surpass the record 2004 deficit of $413 billion, but we will have to see.

A quick look at the CBO figures shows that every year under Clinton saw the deficit shrink, until the last three years when we had growing budget surpluses (the government spent less than it took in - a good thing). Clinton's economic record shows an improvement from the $290 billion deficit he inherited to a $236 billion surplus ($536 billion positive turnaround). However, Bush took the $236 billion surplus and will have turned it into a $400 billion deficit ($636 billion negative turnaround).

These are facts my friends - not spin.

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