The Good News: We Are the Economy

Summary


On this New Year's day, we have some economic reasons to cheer. Since September, we have seen increases in manufacturing output, nonfarm employment, home and car sales, homeownership rates, consumer spending and stock prices. Our international trade deficit declined. Inflation and interest rates are low. In the most recent data (third quarter 2011), our overall economy grew at an annual rate of 2.5percent. And our expensive Iraq war is ending.

What about the federal budget deficit? As a percent of the Gross Domestic Product - our national "family" income - last year's federal deficit ($1.29 trillion) was 8.9 percent of GDP ($14.5 trillion). President GeorgeW. Bush's last budget deficit ($1.41 trillion) in fiscal year 2009 was 10 percent of GDP.

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The Good News: We Are the Economy

America's accumulated outstanding debt ($14.4 trillion) currently equals 99 percent of our GDP. By comparison, our U.S....

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