2009 Deficit By Far the Largest in US History
In order to understand just how big the US deficit is going to be in 2009, it helps to have some historical perspective.
The United States has endured a great deal as a nation. Multiple wars. The Great Depression. 9/11. The current "Great Recession". The list goes on and on.
With that in mind, I thought it would be interesting to list the top ten largest deficits that the United States has posted during its history as a nation (in inflation-adjusted dollars).
10. $420 Billion Dollars (1991) - The costs of fighting the "Persian Gulf War" and a recession ensured that the United States would continue its run of "red" years.
The recession officially lasted eight months (July 1990 to March 1991) and caused the US to have a budget shortfall of over $400 billion in inflation-adjusted dollars.
9. $430 Billion Dollars (1986 and 2003) - Lower-than-anticipated economic growth and heavy spending contributed to the large deficit in 1986, while tax cuts and two wars (Afghanistan and Iraq) helped to ensure a large deficit in 2003.
8. $438.5 Billion Dollars (1992) - Although a recovery was underway by this point, the government continued to spend heavily in order to get the economy back on its feet.
7. $442 Billion Dollars (1983) - It's hard to believe that Ronald Reagan, one of the most popular presidents of all time, was facing a very serious test back in 1983.
High unemployment numbers and inflation were wreaking havoc with the economy in 1983, and the government suffered from a substantial drop in tax revenues.
The economy eventually recovered, and Reagan easily won a second term just a few years later.
6. $455 Billion Dollars (2008) - 2008 is the first year that the effects of the "Great Recession" were really felt. Combine that with a myriad of other expenses and you had a recipe for a near half-trillion dollar deficit.
5. $462.6 Billion Dollars (2004) - Hard to believe that the government had posted a surplus of over $150 billion dollars (inflation adjusted) just a few years earlier.
4. $561.2 Billion Dollars (1945) - World War II.
3. $574 Billion Dollars (1944) - World War II.
2. $669.4 Billion Dollars (1943) - World War II.
1. $1.8 Trillion Dollars (2009) - Let's put this into some perspective.
The deficit in 2009 will be nearly three times larger than the second-largest deficit total (1943).
The deficit in 2009 will be larger than the second, third and fourth deficits COMBINED.
These three deficits occurred when the United States was fighting in a major world war.
This massive deficit (2009) comes just eight years after a $152.76 billion dollar surplus was posted in 2001. Your best guess - when will the United States post another surplus? I'll let you chew on that for a while.
What about World War I?
In 1919, the United States posted an inflation-adjusted deficit of around $190 billion dollars. An impressive number, but not large enough to crack the top 10.
What about the Great Depression?
There were a string of deficits posted during this time, but none large enough to crack the top ten. It wasn't until World War II began that the United States started posting really large deficits.
To me, this data just makes the 2009 deficit figure even more sobering.
Source: A History of Surpluses and Deficits in the United States
Filed under: General Knowledge