Thursday, July 12, 2007

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.