On a more positive note however, according to estimates released on Friday by the Congressional Budget Office at least, the national deficit when viewed as a share of the country’s economy decrease to around 7%. This represents a significant improvement on the 8.7% deficit recorded last year and the rather painful 10.1% deficit of 2009.
Over the course of the past four years, deficits interpreted as a GDP share have equaled all-time highs set in 1947.
Economists have cites an increase in overall revenue as the primary driver behind the lower deficit. The year saw federal government collections increase by a solid 6% compared to the 2011 fiscal year. This was funded for the large part by business taxes, which shot up an extraordinary 34% during the 12-month period – something attributed to a series of new tax rules implemented during the year.
There were also 4% and 3% increases in both payroll tax and income tax receipts respectively.
The report showed spending had decreased by 2%, though this has been attributed to changes made in relation to payment timings. Government spending on defense, unemployment benefits, education and Medicaid all saw declines, while Social Security saw its biggest increase in years by gaining 6% in additional outlays.
Medicare spending also increased, though at just 3% was considerably lower than the increases of the last couple of years.
All in all, this year’s recorded deficit has once again taken public debt to new highs and broken every record in the book. According to reports, we now owe a combined total of $11.3 trillion, representing 73% of GDP and a worrying surge from the 67.7% recorded in 2011.