As we know, the government is running huge budget deficits right now. The government has been running a deficit every year for the last several years. Most graphs showing the current deficits are like the one below. For each year they just take the total outlays and subtract total receipts because this is the figure the government gives and our media happily repeats.
(Click chart for Larger Image. Click here for numbers the chart is based on)
The problem with that is that it hides the extent of the problem...
The numbers above show a budget deficit of 1,413 billion in Fiscal Year(FY) 2009 which is a huge increase from FY2008's deficit of 450 billion. While those numbers sound huge and daunting... it's actually worse, but then again, it's always been worse.
The "off-budget" Social Security surplus and Trust Fund help buoy these numbers. The problem is, that money is supposed to be saved and be payed out when Social Security is anticipated to start running deficits in a few years.
There are other off-budget items that distort the numbers as well. There are other off-budget trust funds that collect interest. That money isn't really the governments to spend, it's already been marked for spending at a future date. Also, the U.S. post office which can swing from costly to profitable on any given year. Years with surpluses from the post office are supposed to pay for years with post office deficits.
Therefore, to get a real sense of where the budget is, those numbers have to be removed from the equation. The chart below includes the total "on-budget" deficit.
(Click chart for Larger Image. Click here for numbers the chart is based on)
As you can see, the "on-budget" deficit is worse every year than the "total" deficit. Looking at the "real" deficit may help to change our perspective of the problem. On the red graph you can see that the on-budget deficit was much worse than the total deficit in 2007 and 2008, but only slightly worse in 2009 and 2010(projected). To help illustrate the difference, I created a graph that shows the difference between the "total deficit" and the "on-budget" deficit. (You could also call this the "total off-budget surplus".
(Click chart for Larger Image. Click here for numbers the chart is based on)
In FY2009 the on-budget deficit increased while the off-budget surplus plummeted which meant it could no longer hide the amount of the "true" budget deficit. While in Fiscal Years 200-5,6,7, and 8, the "true" budget deficit was able to be hidden behind the increasing off-budget surplus. It helped make it seem as if the deficit was going in the correct direction.
So in conclusion. The deficit problem is actual slightly worse than advertised. However, the huge increase in the deficit is due, in part, to the budget deficit no longer being able to hide behind the off-budget surplus.
(The source for all these numbers is the Public Budget Database)
Cross Posted from Our Dime.