2. How one measures spending, revenues and deficits makes all the difference.
The deficit in 2004, $412 billion, was the biggest in history.
Or was it? In nominal terms it was, but when measured as a percent of the total American economy, it was far from being the biggest. Since 1962, there have been 10 years in which the deficit was bigger, as a percentage of Gross Domestic Product, than it was last year.
In the past 40 years, the biggest deficit occurred in 1983, when it amounted to 6 percent of GDP. Last year’s deficit was 3.6 percent of GDP.
For the modern era, the record was in 1943 when the deficit amounted to 30.3 percent of GDP.
