EXPLAINERISSUE #014 · 6 MINFACT-CHECKED

The deficit isn't what you think. It's structural, not cyclical.

DN
DAISY NICOLLE
First-world economics, minus the myths
“If you can read a payslip, you can read the federal budget.

Every year the U.S. spends more than it takes in. That gap, the deficit, is usually blamed on whichever party is in the White House. The math tells a quieter story.

A cyclical deficit shrinks when the economy recovers. A structural deficit doesn't. It's baked into what we've promised to spend versus what we've agreed to collect. Right now, most of the gap is structural.

Three lines drive it: interest on existing debt, healthcare for older Americans, and Social Security. None of these bend with the business cycle. All three are locked in by prior law.

That's why the deficit didn't disappear during the last boom, and why it won't disappear during the next one. The math is nonpartisan. What we do about it is not.

NONPARTISANRECEIPTS INSIDE
CHECK YOURSELF

Read the Federal Budget

Can you tell mandatory from discretionary spending?

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