The Treasury Department recently released final budget numbers for fiscal year 2019 (which ended on September 30th), and both parties are glad no one paid much attention. While the observers who downplayed the dismal results, including a nearly $1 trillion annual deficit, are right that there is no need for precipitous deficit-cutting, Congress needs to act soon to limit the borrowing projected for ten, twenty, and thirty years from now. Eventually, high levels of federal debt will constrain effective governance, hurt the economy, and invite a crisis.
The 2019 numbers leave no doubt that the federal budget is headed in an ominous direction. With the economy at or near full employment, revenue fell compared to 2018 (measured relative to the size of the economy). Total revenue was 16.3 percent of GDP, down from 16.4 percent in 2018. Over the past fifty years, the average annual amount of revenue was 17.4 percent of GDP.
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