Robert Samuelson on why things can get a lot worse: Countries everywhere already have high budget deficits, aggravated by the recession. Greece is exceptional only by degree. In 2009, its budget deficit was 13.6 percent of its gross domestic product (a measure of its economy); its debt, the accumulation of past deficits, was 115 percent… Continue reading The Crisis Ahead?
Arnold Kling does the historical break down. In any event, in a non-recessionary economy, the federal government’s ratio of revenue to GDP is generally around 20 percent. While a $1 trillion primary deficit represents less than 7 percent of GDP, it represents about 30 percent of full-employment revenues. Eliminating a primary deficit of that magnitude… Continue reading Budget Crisis