Yearly Report PART II

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Published on Tue, April 14, 2020 2:58PM PDT | Updated Fri, April 17, 2020 6:25PM PDT

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations > PART II > Government 10-K

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The following Management’s Discussion and Analysis (MD&A) is intended to help the reader understand the results of operations and financial condition of our Government. MD&A is provided as a supplement to, and should be read in conjunction with, Item 8. Financial Statements and Supplementary Information.

About Management’s Discussion and Analysis

Fiscal years presented

In this MD&A, we analyze the one-year, five-year, and 10-year periods ending September 30, 2017, the most recent period for which a nearly complete set of federal, state, and local financial data is available. A public company is generally required to analyze its immediately prior three fiscal years. While decisions can be made and implemented quickly within companies, and the impact of those decisions may be seen shortly thereafter, this is not generally the case within government. Therefore, we have provided a longer-term view within this MD&A than we would for a company.

Which changes are discussed

Throughout this MD&A, we discuss key changes in revenues and expenditures during the periods presented. We define key changes as those that are the largest dollar changes that when added together comprise at least 75% of the total change being explained. These key changes are highlighted in gray in the tables and then are discussed in the sections following each table. Note that only key changes are discussed, though all changes in major categories are shown in the tables for your information.

Modification of data

In cases where only calendar year annual data was available, we used one simple formula to create federal fiscal year (October 1 to September 30) data – 25% of the prior calendar year figure plus 75% of the current calendar year figure. All the figures in this MD&A that were converted from calendar year to federal fiscal year in this manner are indicated by * (one asterisk). To create state and local fiscal year (July 1 to June 30) data, we used a formula of 50% of the prior calendar year figure plus 50% of the current calendar year figure. All the figures in this MD&A that were converted from calendar year to state and local fiscal year in this manner are indicated by ** (two asterisks). Finally, for tax revenues, we calculated the impact of tax rates vs. tax bases by holding one constant while fluctuating the other. See more information at Exhibit 99.13.

Comparability of data

See discussion of the comparability of data within this MD&A in Part I, About This Report, Comparability of data and Exhibit 99.12 Data comparability considerations.

Overview

The United States of America (US) is a federal republic composed of 50 states, a federal district of Washington, D.C., five major and various minor insular areas, as well as over 90,000 local governments, including counties, municipalities, townships, school districts, and special district governments. At 3.8 million square miles and with over 328 million people (as of 2019), the US is the world’s third-largest country by total area and the third most populous.

The people of the US, through our Government, seek to form a more perfect union, establish justice, ensure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity.

To achieve the vision of the people, our Government raises money, spends money, and exercises, grants, and rescinds authorities. Our Government generates revenue mainly by taxing individuals and businesses in the US, and to a lesser degree through income on assets invested and charges for government services. Our Government’s most significant expenditure is transfer payments to individuals and subsidies, comprising 48% of its expenditures in 2017, most significantly for Social Security, Medicare, and Medicaid. Personnel and compensation costs is our Government’s second-largest expenditure, comprising 27% of its expenditures in 2017. By segment, our Government’s most significant expenditures are for securing the blessings of liberty to ourselves and our posterity, comprising 53% of its expenditures in 2017.

Trends

During the one-year, five-year, and 10-year periods ending in 2017, we saw a mixture of stagnation, progression towards, and retreat from, achievement of our Constitutional objectives. Our Government’s role in these trends is certainly not clear. However, we believe it may be useful to observe these trends in evaluating our Government. Highlights in key metrics for these years are summarized below.

When comparing 2017 to 2007, we made progress towards our objectives by:

  • growing our economy, including increasing GDP, the S&P 500, median annual wages, the federal minimum wage, and household financial assets, while decreasing business bankruptcy filings;
  • reducing overall crime and physical harm, including reducing reported crime and arrests, border apprehensions, workplace injuries and fatalities, transportation fatalities, instances of most types of fires and civilian deaths from home and other structure fires, non-fatal child victimization, and housing discrimination complaints;
  • improving quality of life for certain populations, including reducing numbers of children in foster care and increasing charitable giving; and
  • tending to our environment, including reducing overall emissions, numbers of poor air quality days in certain large cities, and net energy consumption, while increasing energy consumption from nuclear and renewable sources.

We retreated from our objectives through:

  • fiscal unsustainability of our Government, as our Government’s debt continues to grow as a percentage of GDP and per capita;
  • reduced participation in our democracy, including reduced rates of voting in all elections but particularly midterm elections;
  • increasing specific crime and physical harm, including numbers of civilian deaths from highway vehicle and non-structure fires, consumer complaints, intellectual property seizures, and airport firearm discoveries;
  • increasing challenges to the health of our population, including increased rates of obesity and death from nearly all leading causes, more and more destructive natural disaster incidents and acres burned in forest fires, and increased personal healthcare expenditures;
  • insufficiently protecting our children, including increasing numbers of homeless children and children receiving free and reduced lunch; and
  • increasing challenges to homeownership, including reduced new home sales and homeownership rates.

Our Government’s operations are financially unsustainable. It continues to spend more than it takes in each year, amassing total liabilities and an overall accumulated deficit that reached $35.1 trillion and $14.7 trillion, respectively, at September 30, 2017. Expenditures increased 42% between 2007 and 2017, when they reached a record high of $6.1 trillion annually. Our Government has, however, reduced its annual deficit by 80% from its peak of $2.3 trillion in 2009 to $473 billion in 2017 through increased revenue. Increases in revenue have been driven by both overall economic prosperity (primarily increased taxable income and income on invested Government assets) and tax policy changes. See Part I, Item 1A. Risk Factors, Recently enacted legislation and tax avoidance put downward pressure on tax revenues, reducing Government resources, for discussion of recent significant tax policy changes that could impact these trends.

Macroeconomy and related government actions

Key economic indicators

Below are some key economic indicators for the periods discussed in this MD&A:

 

 

2017

 

 

2016

 

 

2012

 

 

2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rates (Calendar year)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10-year Treasury Rate

 

 

2.33%

 

 

 

1.84%

 

 

 

1.80%

 

 

 

4.63%

US Federal Funds Rate

 

 

1.30%

 

 

 

0.54%

 

 

 

0.16%

 

 

 

4.24%

US Bank Prime Loan Rate

 

 

4.10%

 

 

 

3.51%

 

 

 

3.25%

 

 

 

8.05%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Economic indicators

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross domestic product (calendar year)

 

 

19,519

 

 

 

18,715

 

 

 

16,197

 

 

 

14,452

Gross domestic product (fiscal year)

 

 

19,612

 

 

 

18,807

 

 

 

16,257

 

 

 

14,535

Average annual US inflation rate (calendar year)

 

 

2.1%

 

 

 

1.3%

 

 

 

2.1%

 

 

 

2.9%

Average annual US inflation rate (fiscal year)

 

 

2.1%

 

 

 

0.9%

 

 

 

2.4%

 

 

 

2.3%

Change in average annual US inflation from the respective year to 2017

 

 

—ppt

 

 

 

1.2ppt

 

 

 

(0.3)ppt

 

 

 

(0.2)ppt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock indices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Standard and Poor’s 500 (S&P 500) average daily closing price:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal fiscal year – October 1 to September 30

 

 

2,344

 

 

 

2,061

 

 

 

1,331

 

 

 

1,450

Change from the respective year to 2017

 

 

—%

 

 

 

14%

 

 

 

76%

 

 

 

62%

State and local fiscal year – July 1 to June 30

 

 

2,267

 

 

 

2,027

 

 

 

1,287

 

 

 

1,399

Change from the respective year to 2017

 

 

—%

 

 

 

12%

 

 

 

76%

 

 

 

62%

Differences between beginning and ending closing prices of select stock indices, July 1 of the prior year compared to June 30:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

S&P 500

 

 

325

 

 

 

36

 

 

 

42

 

 

 

233

Change from the respective year to 2017

 

 

—%

 

 

 

808%

 

 

 

682%

 

 

 

39%

Deutsche Boerse AG German Stock Index, Performance (DAX)

 

 

2,645

 

 

 

(1,265)

 

 

 

(960)

 

 

 

2,324

Change from the respective year to 2017

 

 

—%

 

 

 

(309)%

 

 

 

(376)%

 

 

 

14%

Nikkei 225: N225 (NIKKEI)

 

 

3,708

 

 

 

(4,660)

 

 

 

(809)

 

 

 

2,633

Change from the respective year to 2017

 

 

—%

 

 

 

(180)%

 

 

 

(558)%

 

 

 

41%

Financial Times Stock Exchange 100 Index: UKX (FTSE)

 

 

808

 

 

 

(17)

 

 

 

(375)

 

 

 

775

Change from the respective year to 2017

 

 

—%

 

 

 

(4,955)%

 

 

 

(316)%

 

 

 

4%

Chicago Board Options Exchange Volatility Index (VIX) at June 30

 

 

11

 

 

 

16

 

 

 

17

 

 

 

16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset and service prices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold price (per troy ounce)

 

$

1,257.20

 

 

$

1,250.80

 

 

$

1,669.00

 

 

$

695.40

West Texas Intermediate (WTI) crude oil spot price (per barrel)

 

$

50.80

 

 

$

43.29

 

 

$

94.05

 

 

$

72.34

Consumer Price Index (average monthly for the fiscal year):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer price index

 

 

243.9

 

 

 

238.9

 

 

 

228.5

 

 

 

205.3

Growth from the respective year to 2017

 

 

—%

 

 

 

2.1%

 

 

 

6.7%

 

 

 

18.8%

Food price index

 

 

249.0

 

 

 

247.8

 

 

 

232.6

 

 

 

201.0

Growth from the respective year to 2017

 

 

—%

 

 

 

0.5%

 

 

 

7.1%

 

 

 

23.9%

Medical care price index

 

 

473.3

 

 

 

459.1

 

 

 

411.4

 

 

 

346.8

Growth from the respective year to 2017

 

 

—%

 

 

 

3.1%

 

 

 

15.0%

 

 

 

36.5%

Medical care commodities price index

 

 

375.5

 

 

 

362.6

 

 

 

331.7

 

 

 

288.5

Growth from the respective year to 2017

 

 

—%

 

 

 

3.6%

 

 

 

13.2%

 

 

 

30.2%

Medical care services price index

 

 

504.6

 

 

 

490.0

 

 

 

436.3

 

 

 

364.1

Growth from the respective year to 2017

 

 

—%

 

 

 

3.0%

 

 

 

15.7%

 

 

 

38.6%

Hospital and related services price index

 

 

822.3

 

 

 

787.1

 

 

 

665.0

 

 

 

489.6

Growth from the respective year to 2017

 

 

—%

 

 

 

4.5%

 

 

 

23.7%

 

 

 

68.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Housing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US 30-year mortgage interest rate

 

 

3.99%

 

 

 

3.66%

 

 

 

3.66%

 

 

 

6.34%

Median new home sales price (in thousands) 1

 

$

323

 

 

$

308

 

 

$

245

 

 

$

248

Median home values (in thousands) 2

 

$

211

 

 

$

200

 

 

$

173

 

 

$

190

Existing home sales (in thousands of housing units) 3

 

 

5,510

 

 

 

5,450

 

 

 

na

 

 

 

na

New home sales (in thousands of housing units)

 

 

613

 

 

 

561

 

 

 

368

 

 

 

776

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

† Sources: Federal Reserve, Bureau of Labor, Freddie Mac, Energy Information Administration, World Gold Council, Bureau of Economic Analysis, US Census, Bureau of Labor Statistics, Yahoo Finance, Google Finance, Investing.com

na An “na” reference in the table means the data is not available.

1 December of each year

2 Value is the respondent’s estimate of how much the property (house and lot) would sell for if it were for sale. Any nonresidential portions of the property (for example, shared spaces in a condominium/co-op), any rental units, and land cost of mobile homes, are excluded from the value. For vacant units, value represents the sales price asked for the property at the time of the interview and may differ from the price at which the property is sold.

3 Existing home sales are based on closing transactions of single-family, townhomes, condominiums and cooperative homes. Seasonally-adjusted rate.

The first five years discussed in this MD&A

Between fiscal years 2007 and 2012, nominal GDP increased by 12%, with the following sectors experiencing the largest increases: finance, insurance, real estate, rental, and leasing; educational services, healthcare, and social assistance; professional and business services; and government. Early in this first five-year period, in 2007, the housing bubble peaked and shortly thereafter gave way to a financial crisis.

The Great Recession began in December 2007 and was accompanied by a financial crisis that peaked in September-October 2008 as major financial institutions were on the brink of collapse, prompting the federal government to act. Major government action first began in March 2008 when the investment firm Bear Stearns collapsed, and the federal government assisted in J.P. Morgan’s takeover of the failed entity. Then in September 2008, Fannie Mae and Freddie Mac were placed in conservatorship by the Federal Housing Finance Agency. Ultimately, a broader package called the Troubled Asset Relief Program (TARP) was authorized by Congress in October 2008 to stabilize the financial system amid the most severe economic downturn since the Great Depression. Its original goal was to buy distressed assets, such as mortgage-backed securities, from financial firms. That was later changed to inject capital directly into banks through the purchase of bank senior preferred shares and warrants. The program was also broadened to include bailouts for auto firms General Motors Company and Chrysler Corporation, mortgage relief for homeowners, and measures to restart credit markets. Congress originally authorized $700 billion for TARP, which was later reduced to $475 billion (96% of which has since been returned to our Government, along with a surplus on certain investments that totals more than $7.9 billion).

During this period, federal and state budget deficits reached record highs as revenues declined and spending increased. Revenues for state and local governments declined significantly because of the economic downturn, prompting some cuts to spending and higher tax rates as states (except Vermont) are not allowed to spend more than they receive.

After President Obama took office in January 2009, he and the Democratic-controlled Congress enacted the American Recovery and Reinvestment Act (ARRA), which was a stimulus package of temporary tax cuts and spending increases with the aim of boosting the macroeconomy. The legislation’s numerous spending and revenue provisions can be grouped into several categories according to their focus:

  • Providing funds to states and localities– for example, by raising federal matching rates under Medicaid, providing aid for education, and increasing financial support for some transportation projects;
  • Supporting people in need– such as by extending and expanding unemployment benefits and increasing benefits under the Supplemental Nutrition Assistance Program (formerly food stamps);
  • Purchasing goods and services– for instance, by funding construction and other investment activities that could take several years to complete; and
  • Providing temporary tax relief for individuals and businesses– such as by raising exemption amounts for the Alternative Minimum Tax, increasing the Earned Income Tax Credit, adding a new Making Work Pay tax credit and a new American Opportunity Credit for higher education, and creating enhanced deductions for depreciation of business equipment.

At the end of fiscal year 2009, the recession waned, and a gradual recovery began. In December 2010, some tax cuts enacted in ARRA and those enacted during President George W. Bush’s term were extended for two more years. Some of those were eventually allowed to expire in December 2012 – primarily those affecting high-income taxpayers. In March of 2010, the Affordable Care Act (ACA) was enacted, with most of the associated government revenue increases taking effect on January 1, 2013. 

The following five years

The final five years of the 10-year window included in this MD&A was marked by economic growth. Overall, between fiscal years 2012 and 2017, nominal GDP grew by 21%, with the following sectors experiencing the largest increases: finance, insurance, real estate, rental, and leasing; professional and business services; educational services, healthcare, and social assistance; and government. The S&P 500 index grew 76%, while the average annual US inflation rate decreased from 2.4% in 2012 to 2.1% in 2017.

This period was also one of numerous changes in individual income tax law. In December 2012, following President Obama's reelection, he signed into law an extension of the Bush tax cuts again, albeit this time without the lower tax rates on high-income taxpayers.  So, the top two individual income tax rates reverted to their pre-2001 levels of 39.6% and 36%, while the top income tax rate on capital gains moved from 15% to 20%. These tax rates went into effect in January 2013.

Also going into effect in January 2013 were some new taxes from the ACA. This included most notably a new 3.8% tax on unearned income for high-income taxpayers. That is, taxpayers with Adjusted Gross Income (AGI) higher than $200,000 (single) and $250,000 (married) began paying a 3.8% tax on income from interest, dividends, and capital gains, among other sources. Furthermore, there was a 0.9 percentage point increase in the employee Medicare tax for those with AGIs higher than $200,000 (single) and $250,000 (married). This applies to payroll sources of income such as wages and self-employment income. The ACA also put into effect a higher AGI threshold for the medical expenses itemized deduction. Specifically, taxpayers under the age of 55 can deduct medical expenses in excess of 10% of AGI. Before, it was 7.5% of AGI.

In tax year 2014, key new healthcare coverage provisions of the ACA went into effect, including healthcare exchange cost subsidies provided to individual taxpayers through the Premium Tax Credit and the individual mandate requiring Americans pay a penalty if they lacked adequate health insurance.

In January 2017, Donald Trump was sworn in as the 45th president of the US, marking the transition from a Democrat to a Republican and the beginning of many policy changes. The effects of these policy changes are generally not seen in this MD&A as it includes only nine months under the new administration.

Subsequent event

At the time of the filing of this 10-K, the US is in the acceleration phase of a worldwide pandemic of a respiratory disease, COVID-19, which is spreading from person-to-person caused by a novel (new) coronavirus. Reported illnesses have ranged from very mild (including some with no reported symptoms) to severe, including illness resulting in death. At this time, there is no vaccine to protect against COVID-19 and no medications approved to treat it. As such, the Centers for Disease Control (CDC) expects that widespread transmission of COVID-19 in the US will occur; in the coming months, most of the US population will be exposed to this virus.

Widespread transmission of COVID-19 could translate into large numbers of people needing medical care at the same time. Schools, childcare centers, and workplaces may experience more absenteeism. Unemployment insurance claims reached more than 10 million for the two weeks preceding March 28, 2020, compared to 217,000 for the week of March 14, 2020. Mass gatherings may be sparsely attended or postponed. Public health and healthcare systems may become overloaded, with elevated rates of hospitalizations and deaths. Other critical infrastructure, such as law enforcement, emergency medical services, and sectors of the transportation industry may also be affected. Healthcare providers and hospitals may be overwhelmed. Our Government has issued directives intended to slow the spread of COVID-19 through the implementation of social distancing at all levels of society.

This pandemic, as well as our responses to it, may have a significant negative impact on the health and well-being of the US population, as well as on the US economy, at least in the short-term. Certain positive economic and other trends noted in management’s discussion below will likely reverse. Aggregate individual and corporate income will likely decline, and our Government’s primary source of revenue – taxes – will decline accordingly. Another significant source of revenue for our state and local governments, revenue from investments they make, may also be negatively impacted by stock and bond market volatility. In response to this crisis, our Government will need to spend more to help the population regain its health, to support those who are in need of assistance due to the economic impacts of the crisis, and to stimulate the economy once the serious public health risk abates. On March 27, 2020, the “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES Act” was passed into law. This law authorizes more than $2 trillion in Government spending and revenue reductions through tax cuts. See key aspects of this law outlined in Item 1A. Risk Factors, The COVID-19 pandemic may hinder our Government’s ability to achieve its constitutional objectives, at least in the short-term.

Other factors affecting this discussion

For each revenue and expenditure table below, we include two rows at the bottom of the table which show the potential impact of inflation and US population growth on the revenues or expenditures analyzed. These inflation and population figures are not meant to provide a precise measure of the impact of inflation and population growth on the respective revenues or expenditures, as such a measurement is not possible. Rather, we have provided these figures as possible benchmarks for how the revenues and expenditures might have been anticipated to change over time due to these factors. To calculate the inflation and population adjustment figures, we multiplied the prior period total revenues or total expenditures by the rates of inflation (using CPIU) and population growth for the respective periods.

Rates of inflation are shown in the Key economic indicators table above. During the periods discussed in this MD&A, our total population grew by:

  • 2016 to 2017 – 2.0 million people or 1%, 1.1 million through births and deaths and 0.9 million through migration;
  • 2012 to 2017 – 11.2 million people or 4%, 6.4 million through births and deaths and 4.8 million through migration; and
  • 2007 to 2017 – 23.8 million people or 8%, 14.6 million through births and deaths, 8.7 million through migration, and 0.5 million not attributable.

Our population aged 65 years and older grew by:

  • 2016 to 2017 – 1.6 million people or 3%;
  • 2012 to 2017 – 7.7 million people or 18%; and
  • 2007 to 2017 – 13.0 million people or 34%.

Summary results of operations

 

 

2017

 

 

2016

 

 

Changes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In billions, except percentages)

 

Total

 

Federal

 

State and

Local

 

 

Total

 

Federal

 

State and

Local

 

 

Total

 

Federal

 

State and

Local

 

Total

 

Federal

 

State and

Local

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

5,597

 

$

3,339

 

$

2,258

 

 

$

5,097

 

$

3,297

 

$

1,800

 

 

$

500

 

$

42

 

$

458

 

 

10%

 

 

1%

 

 

25%

Expenditures

 

 

6,070

 

 

3,300

 

 

2,770

 

 

 

5,860

 

 

3,195

 

 

2,665

 

 

 

210

 

 

105

 

 

105

 

 

4%

 

 

3%

 

 

4%

Intergovernmental (expenditures)
revenues 1

 

 

 

 

(679)

 

 

679

 

 

 

 

 

(665)

 

 

665

 

 

 

 

 

(14)

 

 

14

 

 

—%

 

 

(2)%

 

 

2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net surplus (deficit)

 

$

(473)

 

$

(640)

 

$

167

 

 

$

(763)

 

$

(563)

 

$

(200)

 

 

$

290

 

$

(77)

 

$

367

 

 

38%

 

 

(14)%

 

 

184%

Estimated impact of inflation on net surplus (deficit)

 

 

 

 

 

 

 

 

 

 

 

 

$

(16)

 

$

(12)

 

$

(4)

 

 

2%

 

 

2%

 

 

2%

Estimated impact of population growth on net surplus (deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

(5)

 

 

(4)

 

 

(1)

 

 

1%

 

 

1%

 

 

1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

 

2012

 

 

Changes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In billions, except percentages)

 

Total

 

Federal

 

State and

Local

 

 

Total

 

Federal

 

State and

Local

 

 

Total

 

Federal

 

State and

Local

 

Total

 

Federal

 

State and

Local

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

5,597

 

$

3,339

 

$

2,258

 

 

$

4,089

 

$

2,487

 

$

1,602

 

 

$

1,508

 

$

852

 

$

656

 

 

37%

 

 

34%

 

 

41%

Expenditures

 

 

6,070

 

 

3,300

 

 

2,770

 

 

 

5,315

 

 

2,982

 

 

2,333

 

 

 

755

 

 

318

 

 

437

 

 

14%

 

 

11%

 

 

19%

Intergovernmental (expenditures)
revenues 1

 

 

 

 

(679)

 

 

679

 

 

 

 

 

(549)

 

 

549

 

 

 

 

 

(130)

 

 

130

 

 

—%

 

 

(24)%

 

 

24%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net surplus (deficit)

 

$

(473)

 

$

(640)

 

$

167

 

 

$

(1,226)

 

$

(1,044)

 

$

(182)

 

 

$

753

 

$

404

 

$

349

 

 

61%

 

 

39%

 

 

192%

Estimated impact of inflation on net surplus (deficit)

 

 

 

 

 

 

 

 

 

 

 

 

$

(82)

 

$

(70)

 

$

(12)

 

 

7%

 

 

7%

 

 

7%

Estimated impact of population growth on net surplus (deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

(43)

 

 

(37)

 

 

(6)

 

 

4%

 

 

4%

 

 

4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

 

2007

 

 

Changes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In billions, except percentages)

 

Total

 

Federal

 

State and

Local

 

 

Total

 

Federal

 

State and

Local

 

 

Total

 

Federal

 

State and

Local

 

Total

 

Federal

 

State and

Local

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

5,597

 

$

3,339

 

$

2,258

 

 

$

4,481

 

$

2,601

 

$

1,880

 

 

$

1,116

 

$

738

 

$

378

 

 

25%

 

 

28%

 

 

20%

Expenditures

 

 

6,070

 

 

3,300

 

 

2,770

 

 

 

4,273

 

 

2,309

 

 

1,964

 

 

 

1,797

 

 

991

 

 

806

 

 

42%

 

 

43%

 

 

41%

Intergovernmental expenditures
(revenues) 1

 

 

 

 

(679)

 

 

679

 

 

 

 

 

(444)

 

 

444

 

 

 

 

 

(235)

 

 

235

 

 

—%

 

 

(53)%

 

 

53%