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Tuesday, August 01, 2006

YTD Increase in National Debt: $511.6 Billion

by Calculated Risk on 8/01/2006 07:58:00 PM

UPDATE: pgl discusses The Structural Deficit

For the first ten months of the 2006 fiscal year (starts Oct 1st), the National Debt has increased $511.6 Billion. The record is $533.6 Billion for the first ten months of fiscal 2004. This represents an improvement of $21.7 Billion, or about 4%, as compared to fiscal 2004.

The debt increase for fiscal 2006 YTD is slightly worse than fiscal 2005 for the comparable period.


Click on graph for larger image.

As a percent of GDP, the deficit has improved slightly over the last few years.

The annual increase in the debt is running around 4.5% of GDP. This is a classic "structural budget deficit" or "high employment deficit" - something most economists believe should be avoided.

In my predictions for 2006, I wrote that the budget deficit would probably not be a big story this year:

The Budget Deficit: Although I expect the General Fund deficit to grow to around $600 Billion in 2006, I don't think it will become a huge story until '07 or '08.
With the slowing economy that prediction still makes sense.