These questions and comments are great for me, because they make me research areas more thoroughly, data that I normally just breeze through.  And frankly, my findings here surprised me a lot.  As a preface, I am somewhat of a hawk on balanced budgets, and deficits being a bad thing.  I have mentioned before that I'm economically conservative, and socially liberal--to the extent that you can generalize things like that.  So from an economic perspective, I don't like these deficits we are running in the US.

But my research surprised me, in the sense that I found that these deficits we are incurring are not out of line historically.  Let me refer you to my data sources, first USA Historical Budget Data, and then second Budget Outlook 2005--2014.  I have looked at the average annual budget deficit, as a % of the GDP, for each of the last three decades, and the projected annual average deficit for 2000--2009 for the USA.  In addition I have shown the highest budget deficit in each decade for one particular year.  Following is the summary chart, and as you will see, the current decade is not at all out of line with the previous three.  

            Avg % deficit         Highest % in one year

`70's             -2.1%                  4.0%
`80's             -4.1%                  6.0%
`90's             -3.1%                  5.4%
`00's             -2.3%                  5.0%

In fact, the first decade of this century will be better than the '80's and '90's, and only slightly worse than the '70's.

A legitimate criticism of the above, is that the first decade of the 2000's is half forecast, and half actual.  So maybe the forecasts won't be achieved.  my own perspective on that is that I think the tax revenue numbers will be overachieved, because they underestimate the growth of the economy, and that overachievement will offset the tendencies of these political loonies to spend as much as they can on "pork".  <snark,,,or maybe partial snark>

If you want to compare to the EU, my understanding is that the goal is to have annual deficits below 3% of GDP, and the USA beats that in this table for every decade except the '80's.

So that puts into perspective the annual borrowing of the US.  But a second question would be, how much does the US owe in total--in other words the cumulative effect of all of this borrowing.  As of today, this number has built to roughly 38% debt, as a % of US GDP.  It is projected to climb to the lower 40%, but be back down in the mid 30's% by the end of the decade.  I was a little disappointed in my ability to find data for other countries, but in what I found, it appeared that France was in the 40% zone, Germany a little higher, and Japan much higher being in the upper 70% of GDP.  I think the UK may be lower than all of these.  So I became convinced that the US is not out of line by any means on this measure--but there are economists on this site who may want to comment here--and perhaps set me straight, as I may have misinterpretted some data.

But my conclusion is that from an economic perspective, the US is going to weather this storm--the 9/11, Iraq war, dotcom plunge storm,, that is.  Though in my business, I'm going to watch this like a hawk for any slipping off this plan, or these assumptions changing.  I'm just encouraged as I see things now.