Annual Federal Deficit
You can see that the federal government has been running annual deficits for many years. The last time the federal government ran a surplus was in 1969 ($3.2 billion), and before that in 1960 ($.3 billion). Above you will notice that the annual deficit grew from 1990 to 1992. If you remember, we had our last recession during this time period. Recently (July 1997), the federal government has been reporting that the deficit may be as low as $30 or $40 billion for 1997. The economy has been doing remarkably well with low unemployment, real GDP growth averaging about 2.6% since 1992, and little inflation. The current reduction in the deficit is due more to the increased tax revenues from a strong economy than government spending cuts. Some analysts have proposed that we will “grow” out of our deficits, others caution that this may only be a temporary reprieve due to demographic circumstances. Baby boomers are in their prime earning years now, but in 14 years the first baby boomers will be retiring. Lower tax revenues? Increased spending on medicare and social security?
In 1997, medical spending in the U.S. hit $1.032 trillion, that is a little over 1,000 billion dollars.