Federal Resee Bank St. Louis By THOMAS M. HOLLOWAY The Cyclically Adjusted Federal Budget and Federal Debt: Revised and Updated Estimates 1 HE cyclically adjusted budget is an estimate what the Federal budget would be after removing the responses receipts and expenditures to economic fluctuations. The uses the cyclically adjusted budget and the methods to measure it have been discussed in several earlier BEA publications. 1 This article presents revised and updated estimates the cyclically adjusted budget, cyclically adjusted debt, and. The revisions are primarily due to the comprehensive revisions the national income and product accounts (NIPA's) that became available in December 1985. The first section focuses on how the NIPA revisions affect the estimates. The second section presents revised and updated estimates the cyclically adjusted budget and debt, based on middle-expansion. The final section presents revised and updated estimates a variant the cyclically adjusted budget, based on - percent. Effects the NIPA revisions The NIPA revisions affect the estimates the cyclically adjusted budget in three important ways. First, because cyclically adjusted receipts and expenditures are derived by subtracting estimates the cyclical responses from actual receipts NOTE. Frank de Leeuw collabod on the conceptual work underlying the revised and updated estimates. Jane S. Reeb and Ivy D. Dunson assisted in preparing the estimates. 1. See Frank de Leeuw and Thomas M. Holloway, "Cyclical Adjustment the Federal Budget and Federal Debt," SURVEY OF CURRENT BUSINESS 3 (December 1983): 25-4 and Thomas M. Holloway, Cyclical Adjustment the Federal Budget and Federal Debt: Detailed Methodology and Estimates, Bureau Economic Analysis staff paper no. 4 (Washington, DC: U.S. Government Printing Office, ). and expenditures, revisions in the actual measures result in a dollar-fordollar change in the corresponding cyclically adjusted measures, ceteris paribus. 2 The same methodological approach applies to the income components wages and salaries, corpo prits, etc. used to estimate cyclically adjusted tax bases. Because the way the cyclically adjusted tax bases are used in the model, the net effect on cyclically adjusted receipts revisions in the actual income components is much smaller than the effect revisions in actual receipts. The second way the NIPA revisions affect the estimates is through. Trend the reference path from which cyclical fluctuations are measured depends on actual constant-dollar. In the case middle-expansion, geometric means actual for each middle expansion are connected to form the series. In the case -percent, regression results based on actual are used to construct the series. In both cases, NIPA revisions affect the s, the gaps between actual and, and the cyclical adjustment corresponding to the gaps. The third way the NIPA revisions affect the estimates is through reestimated regression equations. The most important regression equations include those used to estimate cyclically adjusted income components, cyclical tax elasticities, and the cyclical adjustment net interest paid. In most cases, the specifications the regression equations were not changed; however, partly as a result the NIPA revisions, some the equations 2. The methodological approach is referred to as the "gross-up method." It is described in detail in Frank de Leeuw, Thomas M. Holloway, Darwin G. Johnson, David S. McClain, and Charles A. Waite, "The High- Employment Budget: New Estimates, 1955-8," SURVEY (November 198): 15-1, 18-19. Table 1. Revisions in Estimates the Cyclically Adjusted Surplus or Deficit Based on Middle-Expansion Trend, Selected Quarters [Billions ; seasonally adjusted annual s] 198:1 197: I : I : 1983- I Revised surplus or deficit (-) - -27-14 - -28-37. -2-9 -1-12 Previously published surplus or deficit,(-) -2-2 -1-11 -3-4 - -12-141 -11 Revision -2-2 -2-2 2 3-2 1. -4 Source revision -2-2 -2. - 1 2-1 8 11-3 Data revisions Reestimated equations - - - -1-1 were respecified to improve their performance. An example a respecified equation is the one used to estimate the cyclical adjustment net interest paid. Chart 4 shows the revised and previously published estimates the cyclically adjusted surplus or deficit as percentages middle-expansion. The chart illusts that there is little difference between the two series in most s. Table 1 shows the sources the revisions in selected s when there is a noticeable difference in chart 4. In the table, "data revisions" reflect the first two ways the NIPA revisions affect the cyclically adjusted surplus or deficit; "reestimated equations" reflect the third way. In all s, data revisions are the major source revision. The reestimated equations are sometimes more important for specific categories receipts and expenditures than is suggested by the net effect on the surplus or deficit. 3 3. An example occurs in the second. Reestimated equations caused decreases in cyclically adjusted receipts and expenditures about $2 billion and $1 billion, respectively. The net effect on the deficit was a $ billion increase. -1 11
Federal Resee Bank St. Louis 12 SURVEY OF CURRENT BUSINESS Cyclically Adjusted Surplus or Deficit, Trend 4-5 - - It i i 1 > ill I > i.h'i.t I'M tif 11111 i J > t.t I ill i.j; M.. 11 i huh t i \\ til t t It i rt i it I n 1 r ( I I t i 11 u t 1t t1'- Ml lit t I t..n I nil f u I j i t.i.f i..h i fj - 1955 57 59 1 3 5 7 9 71 73 75 77 79 81 83 85 NOTE. Cyclical adjustment based on middle-expansion. U.S. Department Commerce, Bureau Economic Analysis Revised estimates based on middle-expansion Table 2 shows revised estimates middle-expansion and the companion middle-expansion. The growth s in middle-expansion are lower than those previously published because the revised growth s in actual constant-dollar are lower. 4 The table also shows the gap and the gap. These gaps play a key role in determining the size and sign the cyclical adjustment to the actual budget. A positive gap is associated with a positive adjustment to actual receipts in estimating cyclically adjusted receipts; a positive gap is associated with a positive adjustment to actual expenditures in estimating cyclically adjusted expenditures. The cyclically adjusted budget based on these s and gaps is shown in table 3. The table shows receipts, expenditures, and the surplus or deficit in billions and as percentages. The table also decomposes changes in the cyclically adjusted budget into those resulting from the and those resulting from changes 4. The middle-expansion growth s by period were revised for 195-2 from 3 to 3 percent, for 192-72 from 4. to percent, for -77 from 2 to 2 percent, for -81 from 2 to 2 percent, and for 1981-85 from 2 to 2 percent.. The revised estimates confirm several points that had been apparent in the previously published estimates: Starting in the fourth, the deficit-to- ratio matched or exceeded the ratio in all previous s except for the second 1975. 5 The rise in the deficit-to- ratio in recent years has been the result a decline in the receipts-to- ratio in combination with an increase in the expenditures-to- ratio. The tend to move the budget toward surplus. With the deceleration, the magnitude these declined in recent years from those in the late 197's and early 198's. The rise in the cyclically adjusted deficit-to- ratio contributed to a rise in the cyclically adjusted debt-to- ratio. In earlier articles, it was suggested that the debt-to- ratio has important on macroeconomic developments. Specifically, an increase in the cyclically adjusted debt-to- ratio is associated with an increase in interest s and a decline in the capital-output ratio. 5. In the second 1975, the Tax Reduction Act 1975 caused a sharp one- decline in receipts and resulted in the increase in the deficit.. See de Leeuw and Holloway, "Cyclical Adjustment the Federal Budget and Federal Debt," pp. 37-4. Also see Frank de Leeuw and Thomas M. Holloway, "The Measurement and Significance the Cyclically Adjusted Federal Budget and Debt," Journal Money, Credit, and Banking 17 (May 1985): 232-42. Changes in the cyclically adjusted debt-to- ratio are related to cyclically adjusted receipts and expenditures in the following way: 7 E T, A Z _ Y ~Y~ Y ~y~ where: D = cyclically adjusted Federal debt held by the public at the end the period; Y middle-expansion in current ; E cyclically adjusted expenditures; T = cyclically adjusted receipts; L = Federal direct loans at the end the period; Z = other debt-deficit discrepancy items equal to the change in debt minus the deficit minus the change in loans (AD - (E - T) - AL); 8 g = the growth Y, which is AY7 7. Using the definitions in the text following equation (1) and letting the numerical subscripts represent time lags, the debt-to- ratio can be factored as follows: / D A FF-! F-iF (D-iV AD) F-! - D-! (F-! + AF) PH YY-, AF F \ F From the definitions the variables, AD = E - AL + Z; substituting for AD gives: E T AL -(^>- F YF F the equ#ti*>n shown in the text. 8. The other discrepancy items include net purchases land, timing differences between NIPA and unified budget receipts, and changes in U.S. Treasury operating cash. A complete list the items is shown in table 1 de Leeuw and Holloway, "Cyclical Adjustment the Federal Budget and Federal Debt," p. 39.
Federal Resee Bank St. Louis The first two terras on thef right- discrepancy items between the NIPA in on the denominator hand side involve receipts afnd ex- Federal sector deficit and the change the debt-to- ratio, penditures and together represent the in debt. The final term, referred to as Table 4 shows the terms equation deficit-to- ratio. The next two the " growth factor," basi- (D and the changes in the cyclically terms involve direct loans cally measures the growth adjusted debt-to- ratio annually Table 2. Trend and Actual Unemployment Rate and 1955... 195 1957 1958 1959 19 191 192 193 194 195 19 197 198 199 197 1971 1975 1978.. 198 1981.. 1983.. 1985 1955- I I 195-1 1957-1 1958-1 HI 1959: I I9: I I 191: I I 192: I I. 193: I 194: I. 1 QRFi- T 19: I I 197- I Unemployment Middleexpansion (1) 4. 4 4 5 5 5 5 5 5. 7. 7 7 4. 4. 4. 4 4 4 4 4 4 4 4 4 4 4 5. 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 (2) 4 4 4 ' 5 5 4 3 3 5 8 7 7 5 7 7 9 9 7 7 4 4 4 4 4. 4 4 4 4. 4 4 7 5 5 5 5 5 7. 5 5 5 5. 5. 4 4 4 3 3 3 (1) - (2) (3) - - - 1 1 1 2. 2. 4-2 -1-1 - -2-2 _ i ' - -1 - - - 1-2 -2-1 - - ^ - -1-1 -1-1. 1 1 1 Billions : s at seasonally adjusted annual s Middle-expansion 1,47 1,5. 1,558. 1,593 1, 1,83 1,74 1,8 1,87. 1,937 2,11 2,87 2,1 2,249 2,334 2,423. 2,51 2, 2,77 2,74 2,817 2,889 2,93 3,37 3,112 3,189 3,2 3,33 3,47 3,479 3,553 1,459. 1,47 1,482 1,493 1,55 1,517 1,528. 1,53 1,545 1,553 1,51 1,571 1,58 1,589 1,598. 1,7. 1,1. 1,25 1,34 1,48. 1,2. 1,7. 1,9 1,74 1,7 1,733 1,748. 1,72 1,777 1,792 1,87 1,823 1,841. 1,858 1,87 1,893 1,9 1,928 1,94 1,9 1,983 2, 2,2 2,39 2,58 2,77 2,97 2,11 2, 2,15 2,17 2,197 1 (5) 427 452 472 49 521. 544. 574 37 79 73 779. 849 929 1,18 1,11 1,211 1,327. 1,483 1,7 1,821 1,994 2,193 2,44 2,734 3,8 3,337 3,535 3,71 3,99 391. 398 44 49 417 423 43 437 445. 449 45. 4 4 4 474 48 488. 494. 5 54 5 517 524. 528 532 54 548 553 53 57 57 587 594 7 17 24 32 42 5 4 72 85. 9 71 723 73 751 72 79 783 799 Actual in () 1,49 1,52 1,551 1,539 1,29 1,5 1,78 1,799 1,873 1,973 2,87 2,28 2,271 2,3 2,423 2,41 2,484 2,8 2,744 2,729 2,95. 2,82 2,958 3,115 3,192 3,187 3,248 3,1. 3,277 3,492. 3,57. 1,49 1,485 1,5 1,518 1,515 1,5 1,523 1,54 1,553 1,552 1,51 1,537 1,5 1,514 1,55. 1,58 1, 1,37. 1,29 1,43 1,71 1, 1,8 1,54 1,71 1,92 1,71 1,75 1,777 1,79 1,8 1,81 1,834 1,8. 1,892 1,9 1,948 1,95 1,985 1,993 2,3 2, 2,99 2,147 2,19 2,195 2,218 2,9 2,24 2,255 2,287 2,3 - () x 1 (7) - 3 1 3 - - -5-4 -5-12 -2 4 2-2 2 5 - - - -1. -1-1 - 3-2 4 4 3. 1-1 3. 2 2 - - - - - 2. - -2. -1-3 -3 53 - -5-5 -5 - -4-5 47 198-1 HI 199: I I 197: I 1971: 1-1 I - I : I 1975: I - I. i... 1978- I : I 198: I 1981: I I : I... 1983- I - 1 1985- I.. Unemployment Actual Middleexpansion (1) 5 5 5 5 5 5 5. 7. 7. 7. 7 7 7 7 7 7 7 7 7 Actu- y al (2) 3 3 3 3 3 3 3 3 4 4 5 5 5 5.. 5 5 5 5. 4 4 5 5 8 8 8 8 7 7 7 7 7 7.. 5 5 5 5 5 7 7 8 8 9 9 1 1 1 9 8 7 7 7 7 7 7 7. (1) - (2) (3) 2. 2. 2 2 2 1 - - - - - - o 1. - 2-2 -2 - -1-1. 1-1 - - 1. 1. 1 1 1 1 1 - - - - - 14-2 9 ^ -3-3. 27 - - _ i o' Billions : s at seasonally adjusted annual s Middle-expansion 2,217 2,238 2,259 2,28 2,3 2,323 2,345 2,37 2,389 2,411 2,434 2,45 2,479 2,53 2,52 2,55 2,574. 2,598 2,18 2,35 2,52. 2,8 2,8. 2,73 2,72 2,737 2,755 2,772 2,79 2,844 2,82 2,88 2,898 2,91 2,93. 2,954 2,973 2,991 3,9 3,28 3,4 3, 3,84 3, 3,1 3,141 3,1 3,18. 3,199 3,219 3,238 3,258 3,275 3,293. 3,31 3,327 3,345 3,32 3,38 3,398 3,41. 3,434. 3,452. 3,47 3,488 3,5 3,525 3,54 3,52 3,581 (5) 8 839 85 878. 897 917 94 91. 98 1,1 1,27 1,49 1,7 1,1 1,129 1,155 1,178 1,197 1,2 1,24 1,273. 1,37 1,343. 1,384. 1,41 1,451. 1,59 1,51. 1,1 1,4 1,92 1,735. 1,7. 1,8 1,837 1,881 1,92. 1,97 2,12 2,1 2, 2,18 2,1 2,28 2,347 2,414 2,479. 2,544 2,1 2,9 2,77 2,85. 2,957. 3,24. 3,18 3,184 3,25 3,37 3,372. 3,42. 3,41 3,5 3,55 3,1. 3,79 3,733 3,788 3,843 3,89 3,944 3,993 4,4 Actual in () 2,327 2,3 2,385 2,383. 2,41 2,419 2,433 2,423 2,48 2,4 2,435 2,41 2,478 2,478 2,491 2,491. 2,54 2,595 2, 2,71 2,734. 2,741. 2,738 2,72 2,74 2,755 2,719 2,95 2,42 2,9 2,71 2,752 2,84 2,81 2,828 2,85 2,89. 2,942 3, 2,994 3,2 3,115 3,142 3,181 3,181 3,178 3,2 3,21 3,233 3,157. 3,159 3,199 3,21 3,25 3,24 3,219. 3,1 3,179 3,154 3,159 3,19 3,259 3,33 3,357 3,449 3,492 3,51 3,51 3,547 3,55 3,584 3,59 _ () X 1 (7) - 5 7-4 5-5. -4 38-2 - 1. 1 2 1-14 31-2 - 1. - 1 2 5 3 3 2. 2 2 2 1 1 - - -2 3 1 - -3 24-2 - -2 1 7 ' 2 4 4 5 4 3 2 - - - -' -
Federal Resee Bank St. Louis 14 SURVEY OF CURRENT BUSINESS for 195-85. An addendum to the table presents the debt-to- ratio. Chart 5 shows ly estimates the cyclically adjusted receipts- and expenditures-to- ratios, and the debt-to- ratio. Table 5 shows ly estimates actual debt, cyclically adjusted debt, and the cyclically adjusted debt-to- ratio. The revised estimates confirm several Table 3. Cyclically Adjusted Federal and [Billions ; s at seasonally adjusted annual s] points that had been apparent in the previously published estimates: The debt-to- ratio declined during most s from 1955-74, was relatively flat from -82, then Surplus or deficit ( ) 1955 195 1957 1958 1959 19 191 192 193 194 195 19 197 198 199 197.. 1971 1975... 1978 198 1981 1983 1985 P 1955: I I 195: I I 1957- I. 1958- I.. I 1959- I HI I9- I I... 191- I... 192: I I 193: I I 194- I I.. 195- I 19: I I 71 78 83. 83 9 98 1 1 115 1 119 3. 143 1 19 197 27 233 25 297 314 352 38 427 488 555 4 82 99 725 78 9 7 72 74 75 77 78 8 82 83 83 82 82 82 83 85 89. 91 9 91 97 98 98 99 99 11 12 14 15 18 111 1 115 115. 11 1 11 1 11 119 12 118 119 12 2 4 7 17 18 18 17 18 18 18 18 19. 17 17 18 18 19 2 19 18 19 19 2. 19 19 19 2. 2 21 2 19 19 19 17 17 17 18 18 18 18 18 18 18 18 18. 17 17 17 17 18 18 18 18 19 18 18 18 18 18 18 18 18 19 19 18 18 18 17 17 17 18. 17 17 17 17 18 18 18 4 7 7 3 7-1 1 25. 1. 2. 23 4 17. 38 34 41 91 3 17 25 5 1 1 1 2 2 2. - - 1 1 1 3 2-1 3 1 1 1 1 2 3. 2 - -3 3 3. 2 3-2 1 7 5 2 3. 2 3. 1 2 2 1 3 5 9. 1 11 1 9 18 27 3 21 27. 33 47. 53 2 43 28 21 1. 1 1 1. 1 1. - 1 1-1 - - - 1. - 1 1-1 2. 1 1 1 1-5. 7. 2 3 35 2 8 14 - - 1-1 17 7 7 1 28-7 -5. 28 35. 1 1-1 1. 1 1 - - 1 2-1 5 1-1 2 1 2 - -3 3 2 2 2 1-3 5 4 1. 1 8 72 8 88 91 9 12. 111 115 12. 12 14 18. 185 194 28 4 249. 27 3 358 39 429 473 52 1 72 771 829 897 984 7 9 9 7. 72 72 74 79. 8 8 81 83 8 9 92 9 9 92 92 91 93 9 95 98 11 12 14 19 11 11 114 114 1 115 118 119 12 119 12. 12 1 128 3 9 143 15 155 17 17. 17 18 18 18. 19 19 18 2 21 2 2 2 2 2 2 2 21 21 21 21 21 23 23 23 24 1 1 17 17. 1 17 1 17 17 17 17 17 17 18 19 19 18 18 18 18 17 18. 18 18 18 18 18 19 19 19 19 19 18 19. 19 19 19. 18 18 18 18 19 19 19 2 2 4 7 7 3 2 8 9 3 4 2 2 17 8 1. 24 21 3 52 31 39 43 5 9 8 9 57 7 87-1. 2 2 4 1 3 3 2-2. 1-1 2 1 1. 2 2 1 2 5. 1 2-1 2 2 1-3 2. 4 5 4 7 5 1 1 4. 3 7 11 12 15 2 29 37 3 1 2 4 7 7 3 2 8 9 4 2 2. 17 7 12 12. 19 17 28 41 2 28 31 1 49 37 41 49. 5-1. 2 2 4 1 3 3 2-2. 1 1 2 2 1 1. 2 2 1 2 5. 1 2-1 2 2 1-2. 4 4 7 3 5 2 48 g 4 1 4 i 3 - -14-24 -2 4 - -1-1 - -9 444-37 -42 453-3 5-5 -88 1295-171 - 1 4. 3 4 5 5. 2 2 1-4 4 - - -1-3 3 3 - - - -4-3 -2-1 - -1 - -1. - -4. - -2-1 - -12-11. 159-18 1-1. 2 - -1. 1-2. 32-2 - -1-1 -1. -2-2 -2-2 -1 - -2-3 -4-5 1. 1 1 1 1 1 r - -1 - - 2 1 _ i o' - -1. 8-5 - 1. 2 1-1 - - - - -1-2. - -2-2 2 31-7 4. - -4. - - -7-1 4 1 9-5 1 2 4-35 48-2 9. -24 333-4 -4 314 2 9 1 1. - -1 1-1. -2 - - 5 2-7 - -1-3 -1 - -4 1 1 3-2 1 i -4-3 3 2 3-83 -3 1 1 - -2 2 2 1 2 2 1 1 3 3 8 9 1 7 4 14 2. 8 18 2 23 25 12. 9-1. - 1 1. 1 1. - 1. 1-1 - - - 1. - J 1-1. 1 1 1 1 - -. -8 1 4 - - 2-8. - -12 - -3-17 -1-3 -12-1 -57-1 -18-2 -17-47 -2-45 -4-5 -3 1-1 - - - - -3 - -1-1 -2-3 -2-1 4-2 -1-1 -2-2 - - -5-1 3-2 -2-5 -3 3 1-2. -9-4. - -. 4 p Preliminary.
Federal Resee Bank St. Louis SURVEY OF CURRENT BUSINESS 15 increased every starting with the third. The debt-to- ratio declined or remained flat during many s when the cyclically adjusted budget was in deficit (i.e., when the expenditures line is above the receipts line in chart 5). Given conditions at 1985 levels, a cyclically adjusted deficit-to- Table 3. Cyclically Adjusted Federal and Continued [Billions ; s at seasonally adjusted annual s] ratio about 1 percent would halt the increase in the cyclically adjusted debt-to- ratio. At 1985 levels, that implies about a $48 billion cyclically adjusted deficit. Surplus or deficit ( ) 197- I I 198: I 199:1 I 197: I ' 1971: I : I... :1 : I 1975: I I - I. : I. I 1978- I I - I I 198: I 1981- I : I 1983: I I - I I 1985- I I» 9 141 143 148 155 159. 19 177 18 191 19 195. 19 199 19 199 2 25 28. 21. 232 2 233 237 248 252 258 27 278 289 39 311 31 281 32 332 34 348 35 33 38 383 38 399 4 42 435. 449 48 483 493. 59 524 539 54 59 25 4 57 1 74. 82 83 91 92 71 99. 98 71 72 724 74 784 752 785 1 84 18 18 18 18 18 18 19 2 2 2 2 2 19 19 19. 19 18 18 18 18 19 19 19 19. 19 19 19 19 19 2. 2 2. 19 17 19 19 19 19 19 19 19 19 19 19 19 19 19 19 2. 2. 19 2. 2 2 2 2 21 21 21 2 2 2 2 2 2. 2 19 19 19 19 19 19 2 19 19 19 2. 1 2 5. 3 7 8 5. 9 4-4 4 4 5. 2 8. 1-1 2 4 8 11 11. 19 2 5-35 4 7 8 8 5 17 3 15 7 14 14 14 19 14 9 1 15. 15 25. 2 33 1 17 3 12 8 8. 1. 18-11 - 18 3 4 17 42-32 33 18-1 2 3 1 1 3 2 2 3 2 4. 3 2 4 4 2 2 3 3 4. 3 9 8 5 7 7 3. 4 7 7 9. 4. 7 12 9 12 12 11 11 12 14 14 2 18. 9 1 14 1 7 1 5 2 4 5 8 9 5 3 5 4 1 2 1 2 3. 1 9 4 i5 2 4 4 2 4 1 1-4 2-3 5 14-2 7-2. 1 8 4-7 3-4 3 5 4 4 3. 1. - 3 8 7 1 5 3 1-1 2 1 7. 15 1 2 9 9 2-19 -8 8 2-2 1 39-37 29. 14. 15 19 173 178 18 188. 19 19 193 195 199 198 211 29 21 21 4 5 23. 24 249 242 24. 2. 29 27 27 28 32 312 3 33 355 3 37 378 382. 395 45. 48 42 438 45. 45 42 478 494 58 534 555 58 599 28 53 75 84 714 734 739 74 778 8 812 825 832 84 85 884 94. 934 951 93 99 1,31 21 21 21 21 21. 21 21 21. 2 2 2 2 2 2 2 2 2. 19 2 2 19 21 2 2 19 2. 2 2 2 2 2 21 21 21 21 21 21 21 21 21 2 2 21 21 21 21 21 21 21 2 23. 23 23 24. 23 23 23 23 23 23 23 24 24 24 24 2 8 1 4 4 8. 2-3. 2 3 1-4 3. 7 1 4 1 9 8 21 2. 3 9. 9 1 9 1 19. 11 1 1 3 9 3 12 17 11 15 1 8 2 2 25 29. 2 21 9 3. 19 5 33 43 9 5 12 14 19. 18 19 3 17 11 28 39 2 2 2 1 2 2 1 3 1 1 7 3. 1 1. 3 1 2. 4 1 1 8. 5 2 2 12 2 3 19. 1 4 3 18 9 3 5 1 12 2 2 2 2 2 4 7 1. 4 3 4 7 1 2-1 2 2 3. -2 7 3 8-7 19 3-2 7 15. 7 11 17 4-2. 7 2 1 11. 5 4 7 1 4 15 1. 15 17. 5 11 1 2 2. 19 37 11 4 11. 4 12 15 1 28 3 9 2 35-24 239-25 24 4 3-27 18 2 - -4. -2. - 4 2 33-12. 14 2 9 14-19. -17 9 7 7-18 9 1 28-18. -1 9 3-9 8 3 - -3 112 19 4-73 -4 44 i -38-33 -38 41 9 284-37. 54-5 - -42-43 -44 31 7 25-4 -4. -5-59 -3 - -49-4 -5-72 58-2 95 5-1 -12 115 5-3 -148 149 2 139-179 -192 17-2 -2 - -3 3 1-3 -3 27-3 2 1-1 - - - 4 3-1 -1 1 3-1 -1 12 7-1 - 1 4-1 77 - - 7 1 2 4 5-2 -2-2 - -2 2 2-2 7-2 -2 2-2. -2. 1 4 1 1-1 - -2-2 -2-2 1 7-1 - 2 3 2-2 8 - -3 3 3-3^8-4 4 i -4-4 -5. 43-5 -5 - - - 1 2-4 8 9 2. 3 1-8 2 2 25-2 1 4. - 9 177 8 1 7 1-5 1. 78 8 2-54 33 3 8 5 5. -5 3-8 17 8-1 1 1 12 1 2-4 -1-3 4 i 2. 12-12 1 1 2 32-35 1 5-17 -1 9-14 15-2 -43 4-2 - 1 2 3 1,4 1 3 2 2 3 2 3 2 2. 1 4. 1-2 1 4 1 11. 7. 4. 1 2 5 4 5 7. -2 2 5. 11 1 1 1-1 4 9 11 4 1 1 5-2 4 7 4. -2 5 1. 2-3. 3 4. 4-1 2 2. 1 5 1-3 g 1-7 1 7. 1 - - -2 11-2 -1-4. - - 2-11 - 5. -5. 2-5 -1-1 -15 58 3 33-7 4 2 4-7 7 15-1 1. 4 7-3 -2-2 4 1-14 -8-2. -14 81-1 -1-2 2-1 -29 35 1 9 2 217-21 2 178 19-17 35 4 2-2 " Preliminary.
Federal Resee Bank St. Louis 1 SURVEY OF CURRENT BUSINESS Table 4. -Relationship Cyclically Adjusted and to Changes in the Ratio Debt Held by the Public at Par Value to Trend : Trend * 195 1957 1958 1959 I9 Year 191... 192 193 194 195 19 197 198. 199 197 1971 1975 1978 198 1981 1983 1985 p 17 17 18 184 18. 188 19 191 18 2 21 2 2 25 2 2 2 2 21 21 21 21 21 231 23 23 248 Minus: receipts 183 18 17 183 18 187 18 19 17 17 18 184 19 2 194 18 19 19 2. 19 19 195 2. 2 21 25 19 19 19 Plus: change in direct loans 3 72 3 _ ^ - Plus: other debt-deficit discrepancy items 2-1 - - - - 1 - - - - - - - Equals: change in debt - 1-1. 1 1 2 3 2 1. 1. 1 1 1 3 2 2 3 2 2 2 3 5 5 Minus: growth factor 3 3. 2 2 2 2 2 2 2 2 2 3 3 3 3. 2 2 3 3 2 2 2 3. 3. 3 2 1 Equals: change in debt-to- ratio -4-3 - -1-2 -1-1 -1 - - - 1-1 -2-2 -1-1 -1-2 - - - 2 3 3 Addendum: debt-to- ratio p Preliminary. 1. Federal debt held by the public includes holdings by the Federal Resee. 2. Includes such items as net purchases land, timing differences between NIPA and unified budget receipts, and changes in U.S. Treasury operating cash. A complete, list the items is shown in table 1 de Leeuw and Holloway, "Cyclical Adjustment the Federal Budget and Federal Debt," p. 39. 53 5 48 47 44 43 4 4 39 39. 38 39 38 3 34 32 31 3. 27 28. 28 28 29 28 28 28. 28 31 34 38 Revised estimates based on -percent A variant the cyclically adjusted budget is based an a series associated with a constant -percent. Table shows, for 197-85, estimates the -percent variant and the underlying measures -percent. 9 Compared with the revised and updated estimates the cyclically adjusted budget based on middle-expansion, the deficit-to- ratio the -percent variant was higher in the early 197's, about the same in -75, then lower in all subsequent years. The difference has been about percentage point in recent years. The pattern the differences followed the pattern the differences between the middle-expansion and. percent. 9. The growth in constant-dollar -percent is derived with regression estimates and is 3 percent for 197-74, 3. percent for -81, and 2 percent for 1981-85. Table 5. Actual and Cyclically Adjusted Federal Debt Held by the Public at Par Value [Billions, seasonally adjusted] End year and Actual debt Cyclically adjusted debt based on middleexpansion End year and Actual debt Cyclically adjusted debt based on middleexpansion End year and Actual debt Cyclically adjusted debt based on middleexpansion 1955: I I 195: I 1957- I 1958: I 1959: I I9- I 191: I 192: I 193- I 194: I 195: I.... 8. 9 23 231. 23. 7 7 9. 5 7 7 23 9 233. 235. 237 238 239 238 237 238 238 238 239 244 245 24 248 249 251 252 255. 25 254 255 258 2 2 21 23 22 23 8 9 2 232 231 9 8 9. 23 7 9 7 8. 8 23 232 233 234 234. 233 232 231 23 23 234 23 237. 238 239 24 242. 244 243 244 24 25 253 254 25 259 21. 24 58 57 57 5 5 54 53 52 5 5 5 49 48 48 47 47 47 47 4 4. 4 45. 44 4 43 42 42 42 42 4 41 41. 4 4 4 39 39 39 39 39 38 38 38 38 19: I I... 197: I I 198: I I 199: I 197: I 1971- I HI.... - I : I : I 1975: I HI - I HI 24 27 27. 28 29 271. 28 285 289 295 281 289. 288 284 28 28 288. 289 294 298. 299 38 315 3 32. 328. 331 338 34 34 345 34 348 349 353 359 375 4 423 444 45 484. 5 28 274 27 281 285 29. 3 31 317 327. 317. 328. 33 33 33 337 339 341 34 347 348 357. 32 37 39 37 374. 381 391 394 394 398. 4 42 45. 47 417 435 452 48 48 5. 512 5. 37 38. 37 37 37 37 38 38 38 39. 37. 3 37. 3. 3 35 34 3 33 33 32 32 32 3 31 31. 3 3 3 3 29 28 28 27 2 2 25 2 2 27. 27 27 27 27 ' I I 1978- I I - I I 198- I I 1981- I I ' I I 1983' I I ' I I 1985' I I p 527 537 554 57 58 1 14 2 29 38 48 7 95 7 739 77 783 798 82 854 88 933 98 1,37 1,14 1,14 1,173. 1,21 1,27 1,317 1,371. 1,4 1,477 1,51 1,593 533. 541 559 575 592 11 28 44 55 9 84 71 72 739 7 779 81 823. 835 858 875 888 92 92 995 1,48 1,79 1,97 1,9 1,193 1,241. 1,294 1,33 1,42. 1,441 1,52 27 2 27 27 28 28 28 28 27 27 27 27 27 27 27 27 2 27 2 27. 2 2 27 28 28 29 3 3 31. 32. 32 33 34 3 3 37 p Preliminary. 1. Includes holdings by the Federal Resee.
17 SURVEY OF CURRENT BUSINESS CHARTS Cyclically Adjusted Federal,, and Debt Held by the Public at Par Value, Trend 1 r 55 55 5 5 45 45 4 4 35 35 3 3 25 2 $'r^:^^ C^H^^i^iKvSlf^gijg^ t %>:; ; ^Wj^^w/?;^ ' \ y \ i ' /x~-;vv v /! - * v V>-^S^^^ :'-::^lf^^^ #\ 25 2 ^:f:^jj^^ ; : :: 15 ^^"l^m'b^li^fli^-liff B^^l f irfst^ffl "d \' I tit..r^rt:i.t'ri i4 & f 1-V u 11 'i 1>ii -1' t41.i...i 1 ft t i. i-'i T ll:^, i {^ ri,i.vi 1955 57 59 1 3 5 7 9 71 73 75 77 l il.tv'f 79 15 81 85 83 NOTE. Cyclical adjustment based on middle-expansion. U.S. Department Commerce, Bureau Economic Analysis Table. Cyclically Adjusted Federal and Based on - Unemployment Rate Trend [Billions ; s at seasonally adjusted annual s] percent percent Sur plus or defi cit ( > percent unem ployment -percent 197 1971.. 1975 1978 198 1981 1983 1985 P. 193 7 252 29. 315 355 392. 43 51 572 7. 73 7. 75. 88 19 18 19. 19 19 19 19 19 2 2 21 2 19 19 19 29. 249 27 3 358. 388 42 47 521 9 9 74 823 892 98 2 2 2 2 2 21 21 21 21 2 21 23 24-15 - -17 14-43. 33 5 34-33 -19-3 27-11 -142-172. -1 2 - -1 7-2 18 1-1 - -1-2 -3-4 1,9 1,12 1,193 1,31 1,484. 1,79 1,837 2, 2,23 2,499 2,8 3,15 3,425 3,28 3,81 4,7 2, 2,483 2,58 2,57. 2,74 2,83 2,914 3, 3,88 3,18. 3,273 3,353 3,424 3,497 3,57 3,47 197:1 I 1971: I I - I 19 195 191 195 19 2 21 4 7. 231 242 248. 254 24 27 288. 38 311 31 28 327 334 342 351 3 3 19 19 18 18 18 18 19 19. 19 19 19 19 19 19 2 19 19 17. 19 19 19 19 19 19 198 212 21 214 21 5. 23 2 25 242 24 2 29 28 277 287 33 312 3 335 354 35 375 377 38 394. 42 2 21 2 2 2 2 2 2 2 21 2 21 21 2 2 2 2 2 2 2 2 21 21 21 21 21. 21 21-7 19-19 -19-2 247-23 -2. -14-25 -15-17 - - -2 23-2 - -1-2 -1 235-21 - 19-1 -1. i (\ 19 g -1. 979 1,1 1,1 1,38 1,4 1,93. 1,114 1,9 1,11 1,179 1,24 1,23 1,259 1,29 1,334 1,377 1,48 1,45 1,512 1,55 1,15 1,52 1,7 1,745 1,778 1,814 1,854 1,9 2,37 2,39 2,4 2,431 2,452. 2,472 2,49 2,51 2,53 2,557 2,579 2,1 2,23 2,4 2,8 2,9 2,7 2,73 2,759 2,779 2,8 2,82 2,841 2,8 2,882 2,93 2,92 2,94 TV : I - I 1975: I - I I p Preliminary. Digitized for FRASER Federal Resee Bank St. Louis qq -i q -i -15-4 114 189-72 -38 41 35-29' 33 5-3 o7-12 -4-2 24 2 -L 18 - ' I HI. 1978:1... : I 198: I I 1981:1 I... :1 1983: I HI :1 1985- I... p 384 388 389 4 4 428 444 4 48 49 5 524. 54. 55. 582 11 4 78 82 95 74. 74 712 7 732 72 72 74. 744 748 7 811 777 812 832. percent 19 19 19 19 19 19 19 19 2 2 2. 2 2 2 2 2 21 21 21 2 2 2 2 2 2 2 19 19 19 19 19 19 2 19 19 2. 4 418 43 44 453 4 475 491 497 55 5 551 57. 594. 47. 7 77 77 727 732 738 771 81 8 819 82 841 8 879 899 929 947. 959. 987 1,27 percent 2 2 21 21 21 2 21. 21 2 2 2 21 21 21 2.. 2. 21 23 23 23 23 23 24 24 Surplus or deficit (-) -21-29 41-41 -4. -31 31-31. -17. 9 24-27 3 384-39 -35-21 -1-28 -45-37 34 - - -92 8-15 -12-12 5. -15-13. - 181-175 -195 percent -1 15-2 -2. - 1-1 -1 - - -1. -1. -1-1 -1-1 - - - -1-1 -1. 19-2 -2 2-2 -3-3 3-3 -4-3 4-4 -4 -percent 1,94 1,999 2,38 2,89 2,5 2,23 2,259 2,323 2,393 2,4 2,534. 2,3 2,77 2,759 2,842. 2,94 3,37 3, 3,19 3,28 3,33 3,395 3,41 3,51 3,553 3,599 3, 3,71 3,777 3,833 3,889 3,945 3,99 4,49 4,99 4,154 2,97 2,989 3,11 3,33 3,55 3,77 3,1. 3,1 3,145 3,18 3,191 3,214 3,238 3,21 3,28 3,39 3,32 3,344 3,32 3,379 3,397 3,41 3,433 3,451 3,49 3,488 3,5 3,525 3,543 3,52 3,581 3, 3,19 3,38 3,5 3,7