Analyzing Trends in Federal Government Surpluses and Deficits
Abstract
This project consists of an analysis of the federal budget through the years 1990-2020. The key issues to be addressed are as follows: (1) average percentage of deficit as a percentage Gross Domestic Product (GDP), (2) interest rate(s) on debt depending on forms of debt, (3) annual interest costs, (4) debt structure, (5) government outlay percentages relating to GDP, and (6) government receipt percentages related to GDP. The objectives are to identify apparent trends in the U.S. Federal Government's deficits and implications of annual and total debt. These data are necessary for the analysis of the federal deficit. The federal budget is a complex formulation of many different inputs that can be used to reflect economic standing. The purpose of this analysis is to identify past, present, and future implications of the federal deficit (e.g., net interest costs). The deficit and interest costs are positively correlated. When the deficit rises, so does the amount of interest paid. This is true, assuming that interest rates remain constant. Lately, as interest rates have fallen, the debt burden is lighter, even though the overall debt is larger. Furthermore, higher interest payments lead to less capital devoted towards programs and to the overall budget balance. Conversely, a lower deficit leads to lower interest payments. Therefore, capital can be reallocated to other avenues, such as social programs, infrastructure, and education.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jun 01, 2012
- Accession Number
- ADA563623
Entities
People
- Louis Jackson
Organizations
- Naval Postgraduate School