William_T._Bianco,_David_T._Canon]_American_Polit

538

WHAT DO

THE FACTS

S AY?

Are Deficits and the National Debt

out of Control?

Many politicians say that government spending has gotten out of control and that the

federal budget deficit (the amount by which the government’s spending exceeds its

revenue in a given year) and the federal debt (the accumulation of these annual deficits)

are too high. Is this true? What do the facts say? Let’s look at each in two different ways.

–1,300

–1,100

–900

–700

–500

–300

–100

0

100

Billions$300 Percentage

of GDP

19401945195019551960196519701975198019851990199520002005201020162017

–30

–25

–20

–15

–10

–5

0

5%

19401945195019551960196519701975198019851990199520002005201020162017

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

$16,000

19401945195019551960196519701975198019851990199520002005201020162017

Billions Percentage

of GDP

10

0

30

50

70

90

110%

19401945195019551960196519701975198019851990199520002005201020162017

• What is the biggest difference between the figures on the left and right of each
  chart?


• Which data, the left or the right, do you think are a better indication of the
  size of our budget deficit and debt? Why? Do both sets of numbers reveal
  something useful?


• Economists argue that debt becomes a potentially serious problem when it is
  as big as the overall economy. Have we ever hit that level since 1940?


• After examining these data, do you think the United States’ budget deficits
  and national debt are out of control? Why or why not?

Think about it

Note: This figure shows publicly held debt,

excluding intragovernmental holdings.

Source: Congressional Budget Office, Budget

Projections, various documents from http://www.cbo.

gov/topics/budget (accessed 6/5/18).

Budget Deficits

Public Debt

Note: Deficits include the Social Security Trust Fund.

538 Chapter 15 | Economic Policy

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