Some interesting facts about the history of our Federal budget deficit

Here are some interesting facts about deficits and economic growth in the last 100 years.  As Democrats and Republicans point fingers to pin responsibility for the deficit it is important to understand both parties are culpable.  Republican influence has sometimes resulted in budget surpluses, but also contributed to the biggest yearly deficits.  Democrats don't blow up the deficit in the middle of healthy economies like Republicans sometimes do with tax cuts, but they have run big deficits in times of crisis, and in good times they historically have still, like water building a stalagmite, slowly and steadily added to the national debt.

Top 8 biggest annual deficits - (using deficits over 3% of GDP as the minimum qualifier):

#1 -  1942 to 1945 - WW II saw deficits that averaged about 20% of GDP.  Democrats controlled Congress and the Presidency throughout the war (as they had since 1933).  The nation went into war with a deficit from the Great Depression (see #6 below).

#2 - 1918 - 1919 -  WW I saw deficits shoot up to 12% in 1918, and then 17% in 1919.  This was a period with a Republican House and a Democratic Senate.

#3 - 2009 - 2010 - Deficits of about 9% of GDP - This was a result of a major loss in revenues as a result of the financial collapse, the various government credits and bail outs begun by President Bush and continued by President Obama to treat our ailing economy, and the ongoing wars in Iraq and Afghanistan

#4 -  1982 to 1988 - deficits ranged from 3.04 to 5.88 percent of GDP, averaged around 4.5%.  This was during the Reagan years - Republicans controlled the Presidency and the Senate, Democrats controlled the House.  There was no war at this time (other than the cold war), the economy was healthy and growing, the deficits were driven by tax cuts that reduced revenue coupled with increased spending, primarily in defense.

#5 - 1990 to 1993 - through and after the Gulf War we averaged deficits of about 4.25%.   Democrats controlled Congress, Mr Bush Sr was in the White House, Mr Clinton took over in 1993.  We experienced a recession during this period but the economy continued to grow.

#6 - 1933 to 1936 - After 12 years of Republican control of Congress and the Presidency Democrats took over Congress and the Presidency three years into the Great Depression.  Trying to pull the country out of the Depression we averaged deficits of about 4% for this period.  Before the Democrats took over the Republicans deficit in 1932 was 2.78%.

#7 - 1975-76 - at the end of the Vietnam war we averaged deficits of about 3.75% for these two years.  Democrats controlled the House and Senate, President Ford was in the White House.  The economy was growing but inflation was rampant.

#8 - 2003 and 2004 - Although the economy was growing we averaged deficits of about 3.4% during these years.  Republicans controlled Congress and the Presidency, the deficits were a result of tax cuts coupled with wars in Iraq and Afghanistan

Other notable periods in our deficit history:

The longest period of continuous balanced budgets was from 1920 to 1930.   Republicans took control of both houses of Congress and the presidency in 1921 and maintained that control until 1933.  In 1920 Wilson was President but Republicans controlled both the House and the Senate.   Economic growth during this period was spotty however, as a percent of GDP it did not reach 1920 levels until 1925 then collapsed from 1930 through1940.  It did not reach 1929 levels again until 1941.

Debt exploded during the 1930's through WW II.  After the war, from 1947 through 1960 we alternated between small surpluses and small deficits.

For the 26 years between 1955 and 1981 Democrats controlled Congress.  22 out of those 26 years we ran deficits.  The 4 non-deficit years, 1955, 1956, 1960 and 1969 were years we had Republican Presidents   These years spawned the immortal Republican phrase "tax and spend liberal".  On the upside the economy grew every year during this period.

We continued to run budget deficits from 1981 through 1997.  The amount of the deficit jumped up to around 5% of GDP from 1983 to 1986.  1981 to 1987 was the period when President Reagan's tax cuts were enacted.  Republicans controlled the Senate, Democrats controlled the House. GDP continued to rise each year.  After 1987 Democrats controlled Congress until 1995, each year after Democrats recaptured Congress the budget deficit shrank further from the highs of the mid-80's until they jumped back up in response to the Gulf War.  The economy grew continuously during this period.

In 1995 Republicans took over Congress and maintained that control until 2007.  The budget deficit shrunk further in 1995 and 1996 then we ran surpluses from 1997 to 2001.  In 2001 President Bush took office and Republicans continued to control Congress.  In 2002 we began running deficits again and we have since run deficits continuously.  The economy was consistently strong during this entire period until the housing bubble burst in 2007 leading to the financial collapse in 2008.  2009 was the first year since 1949 GDP shrank in comparison to the prior year.