This graph shows the actual (purple) budget deficit each year as a percent of GDP, and an estimate for the next ten years based on estimates from the CBO.
The deficit should decline further next year and is projected to stay below 3% for the next 5 years.
The decline in the deficit, as a percent of GDP, from almost 10% to under 3% in 2014 is the fastest decline in the deficit since the demobilization following WWII (not shown on graph).
Then he adds,
As an aside, the states are doing better too…
Doesn't get the difference between currency users and the currency issuer.
Bill McBride
1 comment:
July leading flow was only 5B higher than last year and with Fed increasing the Factors by over 800B YoY removing probably 15B in interest income .... trade deficit about at breakeven for July...
Growth in leading flow (paltry +$5B) not enough to support any increase in domestic savings so accordingly deficit is down YoY for July... domestically we are iteratively spending everything we get till taxes take it all away... external sector still saving USDs... foreign holders up $400B YoY rest probably in foreign us bank deposits...
so enough being spent for "muddle thru" but not enough to save any...
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