2012 marked the fourth straight year—and the only four years in the history of the nation--when the federal government’s deficit topped $1 trillion.
Last year’s $1.087 trillion deficit was even greater in inflation-adjusted dollars than the peak World War II deficit of fiscal 1943—which was $54.554 billion in 1943 dollars and $723.8714 billion in 2012 dollars, according to the Bureau of Labor Statistics online inflation calculator.
The deficit has also remained at a higher percentage of GDP over the last four years than at any time since the conclusion of World War II (which ended during fiscal 1946, which began in June 1945).
In February, the CBO had initially calculated that the deficit for fiscal 2012, which ended on Sept. 30, 2012, had been $10894 trillion. That was based on an estimation that the federal government had taken in $2.4491 trillion in taxes during the year and spent $3,5385 trillion.
In May, the CBO revised those figures, putting the fiscal 2012 deficit at $1.087 trillion, based on a slightly higher federal revenue intake of $2.4502 trillion and slightly lower spending of $3.5371 trillion.
In its latest historical data report, the CBO reported the same fiscal 2012 revenue and spending numbers as it had in May, stating that the fiscal 2012 deficit was $1.087 trillion.
In fiscal 2011, the deficit was $1.2956 trillion, according to the CBO; in fiscal 2010, it was $1.2935 trillion; and, in fiscal 2009, it was $1.412.7 trillion.
President Barack Obama was inaugurated in January 2009, during the fourth month of fiscal 2009, and governed for more than eight months of that fiscal year. In his first full month in office, February 2009 he pushed through a economic stimulus plan that the CBO now says will add $830 billion to the deficit in fiscal year 2009-2019.
In fiscal 2008, the last full year President George W. Bush was in office, the federal deficit was $458.6 billion, according to the CBO.
As a percentage of GDP, the deficits for fiscal years 2009-2012 were greater then the federal deficits in any yea since World War II.
In July, the Bureau of Economic Analysis published a revision of its historical estimates of GDP going back to 1929, which slightly increased historical GDP. In its latest historical tables on the deficit, the CBO adjusted its estimates of the deficits as a percentage of GDP to reflect the BEA’s new GDP numbers going back to 1973. Because the BEA’s estimate of GDP went up, the BEA’s estimate of the deficits as a percentage of GDP went down.
However, even when CBO adjust its estimates of the deficit as a percentage of GDP going back to 1973 (but not earlier than that) to account for the BEA's increased GDP estimates, the smaller deficits as a percentage of GDP that CBO is now reporting for last four fiscal years (2009-2012) still exceed the unadjusted deficits as a percentage of GDP for any year going back to the end of World War II.
In fiscal 2009, using the new GDP numbers, the deficit was 9.8 percent of GDP, according to the CBO’s updated figures. In fiscal 2010, it was 8.7 percent of GDP. In fiscal 2011, it was 8.4 percent of GDP. And, in fiscal 2012, it was 6.8 percent of GDP.
In fiscal years 1942-46, the five years effected by World War II, the deficits were 14.2 percent, 30.3 percent, 22.7 percent and 21.5 percent and 7.2 percent of GDP, according to data published by the OMB that has not been adjusted to reflect the Bureau of Economic Analysis latest update of historical GDP numbers.
In fiscal 1947 through fiscal 2008, the deficit never reached the 6.8 percent of GDP it reached in fiscal 2012.