Taking into account all the budget legislation passed in the last year, the Congressional Budget Office says the country will run a $1.1 trillion deficit in fiscal year 2012.
The CBO reports that is nearly 7 percent of the United States’ GDP, but is “nearly 2 percentage points below the deficit recorded in 2011, but still higher than any deficit between 1947 and 2008.”
There are two graphics that really tell you the story outlined in the CBO’s fiscal outlook. First, an overarching look at deficits and surpluses since 1946:
And, then, a look at the projected fiscal situation of the country through 2022. the bottom line is that the country will be running a sizable deficit for the next decade. But the CBO analyzed what would happen if congress allows the expiration of tax cuts ennacted in 2001, 2003 and 2009. The blue assumes those tax cuts are extended and the brown assumes congress allows those taxes to expire. If they expire, the deficit could hover around 2 percent of GDP by about 2015.
It’s also important to note that these numbers are based on the CBO assumption that the economy will remain sluggish, with the GDP growing at a 1.4 percent rate this year to a 2.5 percent in 2022.