Government Spending Has Exceeded Revenue in All But Six Years Since 1980
Combined federal, state, and local government debt held by the public increased by a factor of six since 1980 as our government ran deficits in most years over that time (Fig. 15). Tax revenue, the largest and most consistent source of government revenue, exceeded spending only in 2000.
In 2016, federal, state, and local governments ran a combined deficit of $770 billion, close to our total government spending on national defense and veterans in that same year. Most of this deficit comes from the federal government spending $597 billion more than it brought in during that year. All states except Vermont are required to balance their budget; however, states do run deficits some years due to unbudgeted oscillations in income from their investments.
Although the most recent data available for combined government deficits is from 2016, the federal government has since run deficits of $665 billion in 2017 and $779 billion in 2018 – more than the GDP of Saudi Arabia.
Total government debt held by the public in 2017 reached $52,086 per person, an increase of 62% over the last decade from $32,121 in 2008 (adjusted for inflation). This combined government debt of $16.9 trillion in 2017 is equal to 85% of GDP. The largest share is owed to foreign entities, followed by US households and businesses, the Federal Reserve, and state and local governments, in that order.