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Surplus / Deficit to GDP
About This Indicator
What Is This?
What Washington collects minus what it spends, as a share of GDP, yearly since 1930: the Office of Management and Budget's receipts and outlays over the Bureau of Economic Analysis's GDP for the same fiscal year. OMB's own table can divide by an older GDP estimate, so a year can differ from its printed figure by a tenth of a point. Above zero is a surplus, below it a deficit.
Why Does It Matter?
It is a year's borrowing measured against the economy that carries it: a 5% deficit means Washington borrowed about a nickel for every dollar the country produced.
What Moves It
Receipts are the steadier half, within a few points of 17% of GDP for most of the postwar era. Spending is the half that swings, topping 40% of GDP in World War II.
Can Politics Influence It?
Budgets, tax bills, wars, and stimulus move it, but much spending runs on decades-old laws like Social Security and Medicare, so any one Congress controls less of the gap than it seems.
Key Idea
Part of any year's balance comes from the business cycle: a recession cuts receipts and raises benefits before anyone votes. So the same tax and spending laws can run a deep deficit in a slump and a far smaller one in a boom.
Not Scored
Source: Computed here. Federal receipts minus net outlays, from the two series above.
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