Saturday, February 6, 2010

Random Fiscal Factoid: Alt Universe U.S.? By Paul Kedrosky ·

Out of curiosity, what do you think the U.S. deficit would look like today if annual federal fiscal expenditures had grown at 4% since 2000, rather than at almost 8% compounded? Answer follows:

In short, if U.S. expenditures had grown at the rate of inflation the country would have run a surplus as recently as 2008. Yes, yes, I know, who knows what revenues would look like in this scenario, and all else being equal, etc., but it's still an interesting thought experiment. 

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