Government Shut Down

[gvidas]

Originally Posted by glatt

My issue with % of GDP is that the government doesn't have access to the entire GDP to spend it. I think a more useful statistic might be to see a % of the total revenue.

But I'm no economist.

It isn't that the number is literally relevant. The point is that neither the deficit as an absolute number, nor the GDP as an absolute number, is terribly meaningful -- they both need to be contextualized. To do this, you can compare them to one another, and look at relative changes.

A crude example: spending $100 a month on a cell phone with a good data plan is a big deal if you're 16 and work part-time at McDonalds; if you're an investment banker pulling in 6 figures a year, it's a fairly minor expense. You can represent this in general by looking at an expenditure as a percentage of annual income.