In an upcoming post, I'm going to try to thrash out some of the details about the origins of the federal budget deficit, with an idea to figuring out how to make it go whence it came. But first, I'm going to set out some historical background, now that the data from the 2008-9 fiscal year have been added to the Department of Finance's Fiscal Reference Tables .

As I noted in this post, there's not much sense in comparing nominal figures across generations, so I'm going to express the numbers that follow as a per cent of nominal GDP and in terms of per capita 2009 dollars. First up is the deficit:



It's getting more and more difficult to remember just how bad things were before 1995. The federal government ran deficits upwards of 5% of GDP, year after year, for the better part of a generation. Here is what has happened to the federal government's debt:



The current situation is nowhere near as bad as it was 15 years ago, but no-one wants to get back in that hole again.

Here is how federal government spending and revenues have evolved, expressed in terms of per capita 2009 dollars:





Although real, per capita spending has gone up over the past few years, this increase should be put into the context of the cuts in the 1990's. Real per capita spending is pretty much what it was 25 years ago.

In any case, this isn't the appropriate metric for measuring the size of government. For reasons explained in great detail over here, the proper measure is the share of GDP:

Since 2000, the GDP share of federal spending has increased by 1.3 ppts, but the revenue share has fallen by 2.8 ppts. In other words, more than two-thirds of the narrowing gap between revenues and spending since 2000 can be ascribed to falling tax revenues.