Federal Budget Deficit Calculator
Calculate the federal budget deficit (or surplus) by entering total government revenues and total expenditures. A deficit occurs when spending exceeds revenue; a surplus occurs when revenue exceeds spending.
Include all tax receipts, fees, and other income (in dollars)
Include mandatory spending, discretionary spending, and interest on debt (in dollars)
Current-year nominal GDP in dollars
Formulas Used
Budget Balance
Budget Balance = Total Revenues − Total Expenditures
Federal Budget Deficit (when Expenditures > Revenues)
Deficit = Total Expenditures − Total Revenues
Deficit-to-GDP Ratio
Deficit-to-GDP (%) = (Deficit ÷ Nominal GDP) × 100
Keynesian Spending Multiplier
Multiplier = 1 ÷ (1 − MPC) | Assumed MPC = 0.80 → Multiplier = 5.0
Estimated GDP Impact
GDP Impact = Deficit × Spending Multiplier
Assumptions & References
- Revenues include individual income taxes, payroll taxes, corporate income taxes, excise taxes, estate taxes, customs duties, and miscellaneous receipts (OMB definition).
- Expenditures include mandatory spending (Social Security, Medicare, Medicaid), discretionary spending (defense, non-defense), and net interest payments on the national debt.
- The 3% of GDP deficit threshold is the benchmark established by the EU Stability and Growth Pact (1997) and widely cited by the IMF in fiscal sustainability assessments.
- The Keynesian multiplier assumes a marginal propensity to consume (MPC) of 0.80, consistent with mid-range empirical estimates. Actual multipliers vary by economic conditions, monetary policy stance, and openness of the economy (Blanchard & Leigh, IMF 2013).
- This calculator computes the nominal (headline) deficit. It does not decompose the deficit into structural vs. cyclical components, which requires an estimate of the output gap (CBO methodology).
- Crowding-out effects, Ricardian equivalence, and dynamic scoring are not modeled.
- Sources: U.S. Office of Management and Budget (OMB); Congressional Budget Office (CBO); IMF Fiscal Monitor; EU Stability and Growth Pact; Blanchard & Leigh (2013), "Growth Forecast Errors and Fiscal Multipliers," IMF Working Paper.