Part I of the series
note: Fiscal deficit in image is in millions of US $
Click here for a larger Visual
Between 1981 and 1992 ( Republican years) the deficit was on an increase. At the same time the Republicans went for a strong increase in Debt as a % of GDP and a drop in interest rates. ( i.e Finance the growing deficit with more debt - at a “cheaper cost”)
Between 1991 and 2001 the 12 month rolling deficit went from a -300 Bn towards a +300 Bn in 2001. The savings rate at the same time dropped from a 8.00% to a 2.00%.
Between 2003 and 2006 Q4 the deficit has been declining ( from a -400 Bn tow a -200 Bn). The savings rate at the same time has dropped from a 2.00 % towards a negative -2.00%.
There does not seem to be a relationship between the fiscal deficit and the savings rate ( change in one does not seem to result in a change in the other)
Savings by its very nature is supposed to finance the deficit.
Its clear that the contribution of savings towards financing deficit has declined from 2001 (currently at a negative savings rate)
Question 1 - So what is financing the deficit ?
Also see ( will give indications of the fiscal policies of Republicans versus Democrats )
- USA - USA - Fiscal situation as a percentage of GDP, under the recent four Presidencies ( since 1980 )
- USA - Relationship between Total Debt ( data from 1929) and External debt as a % of the GDP (data from 1995)
- USA - Relationship between GDP and Savings rate ( Quarterly data since 1985 )
- USA - Manner in which the Deficit has been financed since 1995 ( Savings viz external debt)
The title of the graph is illogical. “Viz[.]” means “namely” or “in other words”. But I do agree with the interpretation.