Wednesday, January 16, 2013

Nice graphic showing the 2012 Federal Budget and historical trends in spending and revenues. Are things getting better???

Nice graphic showing the 2012 Federal Budget.  The left graphic shows the major categories of spending categories (mandatory and non-mandatory) and revenue sources.  The box above the revenues shows the shortfall---the Budget deficit for 2012.

The graph on the right shows Federal Spending and Revenues as a percent of GDP overtime. Historical average for Federal spending is 20.5% of GDP and Tax Revenues average 17.9% of GDP over time. 

You can see at any point in time where actual spending and/or revenues are relative to the long term average.

 The Gray Bars represent periods of Recession---notice, in general, spending increases and revenues decrease during recessions.  Automatic Stabilizers (unemployment compensation, Food Assistance, other Income support programs, etc) and discretionary Fiscal Stimulus Plans (roads, bridges, and other infrastructure projects) are implemented, at the same time when tax revenues are decreasing. 

Budget deficits increase during recessions and, hopefully, decrease when recovery occurs.

You be the judge.

Source: The Big Picrture Blog
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