Quote:
Originally posted by gaijinda
As a percentage of the US Economy and population I am not worried.
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Why not? Reasons?
Federal revenue was appx 16-17% of GDP in FY04. The Federal deficit was appx 4% of GDP in FY04. Does a deficit/revenue ratio of 25% seem healthy or sustainable?
Looking at the federal deficit as a percent of the US economy doesn't give the complete picture, because the deficit isn't serviced/repaid by "the US economy", it is serviced/repaid by federal revenue. And, compared to federal revenue, the federal deficit is simply too large and growing too fast. This is not sustainable. Either federal revenue (tax) has to rise, or federal spending has to fall.
More reading, this time from the Dallas Fed
http://www.dallasfed.org/research/indepth/2004/id0403.html
and the Congressional Budget Office
http://www.cbo.gov/showdoc.cfm?index=1944&sequence=0