Final FY 2011 Figures Confirm Enormity of Deficit

I have written twice in recent months about the enormous size of the federal deficit and how the political world talks about the deficit but never discussed its actual size.  The Congressional Budget Office has now updated its figures to the full fiscal year ended September 30, 2011, and has confirmed the enormity of the amount.  According to today's news reports, the deficit for the full fiscal year amounted to $1.3 billion.  The CBO report is available as a pdf on its website.  While the report gives the hard numbers, it fails to  provide the percentage figures that would place them completely in context.

The following table shows the basic numbers:

                                                              Fiscal 2011
                                                        (in billions of dollars)


                                                     Receipts                        2,302

                                                     Outlays                          3,600

                                                      Deficit                           1,298

Thus, the deficit as a percentage of outlays was 36.06% -- more that one/third of the federal budget was paid for by borrowing money.  Another way of looking at the problem is that we spent 56.4% more than our revenue.

Imagine a family spending $100,000 per year, when its income was $64,000.  Obviously, it would have to make substantial cuts in expense in order to survive.  The same goes for the federal government.  The current discussion of cuts of $1 or $2 trillion over ten years is only nibbling around the edges.  To achieve real reductions, entire programs and agencies wil have to be eliminated.