the federal budget(2)

The Federal Budget

A Graphical Primer

2008 Budget Forecast

• $2.902 trillion in total spending• 4.8% raw dollar increase over FY

2007 • $239 billion projected deficit• 2.0% raw dollar deficit reduction

over FY 2007• 929.8 billion in discretionary

spending

Where does discretionary spending go?

Expenditures

• Majority of discretionary expenditures for military / security

• Non-discretionary spending counts for almost 3/5 of the total budget

• Social security and emergency funding are considered “off-budget” spending

Where does the money come from?

Receipts

• Majority of receipts from individual income tax

• Corporate income tax receipts slightly more than ¼ of individual receipts

• Off-budget (i.e. social security) tax receipts total 674.1 billion

On-Budget Receipts and Expenditures since 1901

The Changing Budget

• On-budget spending hit 1 billion for the first time in 1917

• 10 billion in 1918• 100 billion in 1964• 1 trillion in 1995• 2 trillion in 2005• Revenue has exceeded expenditures

27 times since 1901• Revenue has exceeded expenditures

only 3 times since 1960

Budget & GDP

• Gross Domestic Product (GDP) is the total value of final goods and services produced in a year

• Budget is often discussed as a percentage of GDP

• Useful because inflation makes raw dollar amounts a deceptive indicator

Budget & GDP (1940-2008)

Budget & GDP

• As a percentage of GDP, expenditures average 20.4 % with standard deviation of 5.6

• Standard deviation and average are skewed because of extremely high WWII expenditures

• Disregarding WWII yields 19.6 % with StdDev of 2.8

• Receipts average 17.5 % with standard deviation of 2.4, since WWII did not affect revenue

National Debt

• The national debt reflects the tendency for budget expenditures to exceed receipts

• Debt rises during budget deficits• Total current outstanding debt

over 9 trillion dollars

National Debt since 1940

The Federal Budget

• To learn more about the federal budget, visit www.gpoaccess.gov/usbudget/

• All statistics gleaned from US government charts and tables

Note

The photos on slides 1 and 14 are licensed Creative Commons attribution, Slide 1 is

flickr memberwww.flickr.com/photos/pixelcore/

Slide 14 is www.flickr.com/photos/pling/