07 June 2018

Deficit Swing - How Deficits Have (and are projected to) Change Under Each President

Trump signed a budget that will increase the deficit to a trillion dollars.

The deficit will grow simply because the economy is growing. If the deficit were stable as a percentage of GDP, it would grow about $100 billion during Trump’s four-year term.

Using the average spending and tax levels since 1979, the deficit under Trump would grow from about $600 to $700 billion. But given his tax cut this year and spending increases in the next few, it will instead hit $1,017 billion (a trillion) in 2020, or about $300 billion higher than what it would be if the Republican budget just met average standards for fiscal responsibility. (Since 1979, spending has averaged 20.6% of GDP and taxes 17.4%.) And this during a projected boom time; if you aren’t going to lower the deficit when unemployment is under 4% and the stock market is at an all-time high, you aren’t going to lower the deficit.

Here’s a table showing how much the deficit swung during a president’s time in office. Reagan’s first year in office, he had a deficit equal to 2.5% of GDP. In George H. Bush’s first he had a deficit of 2.7% of GDP. So, during Reagan’s time the deficit swung negative by 0.2 percentage points of GDP, which you can see in the "Swing" column.

Deficit (-) or Surplus (+) Swing

Passed on
Ronald Reagan
George H. Bush
Bill Clinton
George W. Bush
Barack Obama
Donald Trump

Trump's first year in office he inherited a deficit equal to 3.5% of GDP.
According to CBO projections, whoever is president in 2021 will inherit a deficit of 4.9% of GDP. And that assumes no recession, which could raise the deficit by hundreds of billions.

Since 1981, the deficit has worsened every time a Republican president was signing and vetoing bills and has improved every time a Democrat was. You know what they say: you campaign like a fiscal conservative and govern like you're trying to make friends with everyone at the bar. "Tax cuts on me! For everyone!"

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