There are two kinds of U.S. government deficits: on-budget and off-budget.
The one that gets all the attention is the on-budget deficit. It’s relatively small. The big one is the off-budget deficit. That is the deficit in Medicare, Medicaid, Social Security, and other government old-age wealth-transfer programs. This deficit is called unfunded liabilities. The present value of the unfunded liabilities of the U.S. government is about $210 trillion. This is not the looming deficit. This is the present value of the looming deficit. This is what the government would have to invest in private industry, which would (we hope) pay a positive rate of return over the life of the programs.
Sadly, the government does not have a spare $210 trillion in the vault ready to invest.
For a detailed study of this deficit — the one that cannot be evaded politically — see Prof. Laurence Kotlikoff’s 2015 testimony to the Senate Budget Committee. Click here.
This brings us to the official, on-budget deficit of the federal government. The U.S. Treasury is the source of this information.
Here are the deficits for the 21st century. Subtract the total debt of one year from the next year. That is the deficit. You will see how much the national debt rises each year. This is the annual deficit.
(For the rest of my article, click the link.)