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The Federal Deficit – Growing & Growing

A deficit, simply put, occurs when an entity – in this case, the U.S. Federal Government – spends more than it brings in. Trying to pinpoint the exact amount of federal deficit is a challenge.

In a sense, the government keeps two sets of books, and Congress seems to write its own accounting rules. For example, in 2005, an audited statement said the government ran a deficit equal to $6,700 for every American household, yet the number released to the public was $2,800 per household. The deficit number seems to vary, depending, among other things, on whether the burdens of Social Security and Medicare are included.

To make the picture even murkier, there are annual deficits (the amount of debt accrued in a single year) and the total deficit (the current grand total of debt). For example, in the first six months of 2008 alone, the federal deficit hit an all-time high of $162 billion, according to the Treasury Department, and figures were estimated to hit $400 billion to $500 billion for the year.

What about the total federal deficit? In March 2009, estimates showed the public debt at approximately $10.9 trillion, or $35,800 for every citizen in America.

When President Bill Clinton (1992-2000) left office, he left behind a surplus of $128 billion in the coffers from his two terms.

By the time President George W. Bush’s two terms had ended, he’d added $400 billion to the deficit (not including the economic stimulus packages introduced in 2008), debt primarily incurred through wars in Iraq and Afghanistan, as well as tax cuts.

On Monday, February 23, 2009, President Barack Obama, in an address to the nation, estimated that the country spends $250 billion per year in interest on the national debt – or one in every ten taxpayer dollars.

Everyone expresses concern about the massive amount of debt we’re passing on to our children and their children, but that “one in ten” fact gives pause. Think about that number the next time you write a check to the IRS or look at the amount of federal taxes that were withheld from your paycheck.

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