The Current Fiscal Picture

OMB has released the latest figures for the budget deficit. My friend at the White House sends me an email to emphasize these key facts:

• This year's budget deficit (for Fiscal Year 2007) is now projected to be $205 billion.
• At 1.5% of GDP, this year's deficit is well below the 40-year average of 2.4% of GDP.
• Federal tax receipts are now at 18.8% of GDP, higher than their 40-year historic average.

Of course, there is still a looming long-run fiscal gap. The short-run fiscal picture, however, does not look historically anomalous.