The Treasury Department has released the Final Monthly Treasury Statement for FY 2013.
The federal government brought in $2.774 trillion dollars for the entire fiscal year and spent $3.454 trillion, for a deficit of $680 billion. So the 2013 deficit was just under 20 percent of total expenditures.
But that deficit represents only 4.1 percent of GDP, compared to a deficit of 6.8 percent of GDP in 2012, according to Calculated Risk.
Where does that put 2013 in historical terms? Here’s a graph from Calculated Risk:
Revenues collapsed during the 2007-2009 recession. At the same time, social safety net spending increased and stimulus measures (including significant tax cuts) added to the deficit.
Now we’re digging our way out of that fiscal mess, even if many think that we are cutting the deficit too fast, focusing cuts in the wrong areas, and/or not doing enough.
Yes, we have some serious long-term challenges, especially as the baby boomers move into old age, but the quickly falling deficit is a clear sign that we are not facing any sort of impending “crisis” unless we manufacture one for ourselves.
As you can see in the graph, our deficit in 2013, as a percentage of GDP, is less than in 1983, 1984, 1985, 1986, 1991, and 1992.
I anticipate that the deficit will decline in 2014 even more than is projected here.