The CBO is expected to release new numbers today estimating the that the deficit will be as much as $2 trillion in the coming fiscal year. It’s a big number. Time‘s Karen Tumulty twitters,”Palpable anxiety over the CBO deficit forecast. $2 trillion? That’s twice what the whole budget was in the 1980s.”
Comparisons of absolute numbers, however, can be a bit misleading here. The deficit is only a problem in relation to the gross domestic product. And if you’re not adjusting your dollars for inflation, our GDP is five times what it was in 1980. But our economy has not grown by 500 percent. Chain the dollars to 2000 levels — I love that term — and you’re looking at something more like a doubled GDP. Which is just to say that a dollar in 1980 is not a dollar in 2010, and the two probably shouldn’t be directly compared.
The CBO estimates that GDP in 2010 will be $14.5 trillion.