U.S. Budget and Economy

As mentioned in my prior post, the U.S. Budget for fiscal year 2011 was released on February 1, 2010. As in prior years, it included the Analytical Perspectives which contains a section on the long-run budget outlook. The following graph shows the outlook for the federal receipts, outlays, and debt held by the public as projected by this section. The actual numbers and sources for this and the following graph can be found at this link . As can be seen, receipts are projected to rise and spending is projected to drop over the next 10 years, causing the deficit to narrow to 4.2 percent of GDP by 2020. However, outlays are then projected to begin a steady rise, causing the deficit to reach a record 62.3 percent of GDP by 2085. This is projected to cause the debt held by the public to rise to 829.7 percent of GDP. This is over seven times the prior high of 108.7 percent of GDP reached in 1946, at the end of World War II. In addition, it is over double the level projected in the pri...