By Michael L. McDonald
The U.S. Federal budget is enormous. We hear about the millions, billions, and trillions of dollars in receipts, outlays, and the deficit, when the media reports on the federal budget. However, it is very difficult to comprehend and interpret what all those huge numbers and amounts of money mean.
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The size of these numbers and the vastness of the United States Government monetary activity requires a better way to personally understand the federal budget. One good way to do that is to express them on a per capita basis. Expressing the deficit as each individual citizen’s ‘share’ can bring it down to size and make it understandable in our everyday financial experience.
In 2008, the last year of completed data, US population and your share of the federal cash flow are shown in Figure 1. The US Population was 304,059,724 on July 1, 2008. Receipts, all cash flow into the Federal Government were $2,524 Billion ($2,524,000,000,000). Outlays, all cash spent by the Federal government were $2,983 Billion ($2,983,000,000,000). The Deficit (Outlays – Spending) was $459 Billion ($459,000,000,000). Your share of the Federal Deficit was $1508 ($459,000,000,000 deficit / 304,059,724 citizens).
Now, $1508
is a number you can understand. For 2008, Your Federal Deficit, your share that the Federal
Government over spent, was $1508. If they do that once in a while with a
plan to repay, it may be acceptable, but deficit spending is something
Congress does most years. It is just as dangerous to the financial health of the
Nation as it would be to your financial standing if you overspent (outgo more
than income), $1508 each year.
Note the
Deficit or Surplus is the within 1-year difference in Outlays and Receipts. The
Federal or National Debt is the sum of the all past years’ deficits.
This article deals with the 1-year surplus or deficit per person. It does not include future deficits or debt for such
government commitments as Social Security, Medicare, Medicaid, and other long
term government benefit obligations.
Figure 2
shows the deficit per citizen for 1980 to 2009.
Figure 2. Graph of Federal Surplus or Deficit per Citizen by Year and President.
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The graph in Figure 2 shows many things, but the most important are listed below. All observation are for surplus or deficit per citizen:
There is a range of the federal debt and surplus per citizen for years 1980 to 2008: The range is $837 surplus to -$1508 deficit with an average of -$612 deficit.
There are trends up and down within presidents and between presidents for the federal deficit and surplus per citizen for years 1980 to 2008.
There are 26 years of deficit spending and 4 years of surplus, with the surplus years being years 1998 to 2001
The difference of the year 2009 to the years 1980-2008 is very significant for the deficit per citizen: The deficit for the year 2009 is 8.5 times as big as the average of the years 1980 to 2008. The deficit for the year 2009 is 6.1 times as big as the average of the Bush-43 years, 2001 to 2008. The deficit for the year 2009 is $4330 larger ($5175-$845) than the average of the Bush-43 years, 2001 to 2008.
Generally, the deficit trends up and down, most of which can be explained by the philosophies of the respective presidents and congresses, and events during those periods. All the Deficits, during 26 of the 30 years shown, are indications of failure to balance the budget, spending more than the government has to spend, and a cause for borrowing. During only 4 of the years did the government have a surplus, 3 years during Clinton, and 1 year during Bush-43.
The most significant pattern on the chart is the size of the deficit in Obama’s first year, 2009. That deficit is 6.1 times the average of the Bush-43 years and 8.5 times the average of all of the previous years from 1980 to 2008. It is a true outlier, being very significantly different from all the previous deficits.
Now you know how much the government is over-spending, and borrowing in your name each year.
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Notes on Data Sources
The financial data is from the Budget of the United States of America for years 1980 to 2008. Population figures are from the U.S Census bureau. Amounts for the year 2009 are from the Congressional Budget Office (CBO) for the year 2009, revised in August, 2009. The CBO numbers include the $787 Billion Stimulus. Any new health care provided by the federal government is not included, nor are increases in spending after the August CBO report. The total current federal debt, the sum of all years deficits and surplusses is $12,000 Billion ($12,000,000,000,000 or $12 Trillion). That makes your share $39,105.
For the table of data and more graph observations, click here.
8-21-09
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