Congress has taken a lot of knocks in recent years, so much so that it might have escaped our attention that the United States Congress once lived to an exemplary standard of fiscal responsibility.
In the following chart, Congress’ Fiscal Track Record, I display the contrast between two periods of Congressional fiscal performance, an exemplary period of twenty-six years following the end of World War II, and then a somewhat more irresponsible period that began in the early 1970s and continues even today.
In the twenty-six budget years 1947-1972, Congress ran fiscal surpluses eight times. It ran deficits smaller than one percent of GDP on ten occasions, deficits between one and two percent on four occasions, and deficits of two to three percent on four more occasions. No deficits during that period exceeded three percent of GDP.
The second set of bars pick up the story in 1973 and carry it forward through 2014. Twenty-three budget years stayed within the limits set in the earlier period, but they were biased toward larger deficits, not smaller deficits. The other nineteen budget years – nineteen – generated deficits exceeding three percent of GDP! In seven of those years, Congress ran deficits that were three to four percent of GDP; in eight of those years, Congress ran deficits that were four to six percent of GDP, and in four of those years, Congress ran deficits that exceeded six percent of GDP.
(discussion continued following the chart)