Friday, May 28, 2010

Deficit Spending - Percent of Federal Expenditures

Courtesy of St. Louis Fed FRED data update for 1Q2010, this plot uses two series of SAAR quarterly data: FGRECPT, which is federal government receipts and FGEXPND, which is federal government expenditures. I then calculate the percent of total federal expenditures that is borrowed ([FGRECPT-FGEXPND]/FGEXPND).

So, the question is what is the tipping point? Most analysis in the public domain seems centered around total debt as a function of GDP, and 100% as some kind of threshold...anyone see any papers using this framework?