There are many of us who fret about the nation’s financial future. We are right to be concerned. The accumulated national debt is racing toward the $18 trillion mark and there are unfunded liabilities beyond that, including future Social Security and Medicare expenditures.
But America’s annual federal budget deficits have actually been declining in recent years and one could argue that the level of our deficit spending is now back down to normal levels. At least this is the perspective offered by economist Justin Wolfers, who points out that the Congressional Budget Office now estimates that the federal budget deficit for 2014 equaled 2.8 percent of gross domestic product, down from 4.1 percent the prior year. That means that the federal government’s annual budget deficit is now smaller than its average share over the past 40 years of 3.1 percent of gross domestic product.
The U.S. budget deficit has fallen during each of the past five years and is now considerably smaller than the 9.8 percent deficit recorded during the 2008-2009 fiscal year. The deficit is expected to narrow even further next year, but beyond that, could begin to rise again depending upon economic conditions and the impact of Medicare spending and that of other expanding programs.
