The Average Joe’s Guide to the Budget Crisis

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NEW YORK (MainStreet) — If you’re interested in understanding the country’s budgetary woes – beyond the fact we’ve racked up a substantial deficit – you might want to check out this infographic from the Congressional Budget Office.

Released Monday, the graphic outlines how exactly the nation’s mandatory expenses, including $725 billion in Social Security, $275 in Medicare coverage and $700 billion in defense spending, drastically outweigh its current revenue sources.

The graphic also illustrates how the deficit has increased or decreased since 1971.

The bottom line, figuratively and literally: The federal government's budget deficit for 2011 was $1.3 trillion, which, at 8.7% of gross domestic product, was the third-largest shortfall in the past 40 years.

According to the CBO, about $10.1 trillion in debt is held by the public. Debt held by the public is usually equal to the sum of annual deficits and surpluses, but can be affected by other factors too, including student loans and other federal credit programs. 

In November, a Congressional supercommittee failed to reach an agreement on how to eliminate up at least $1.2 trillion in government red ink over the coming decade. The failure means that about $1 trillion in automatic across-the-board spending cuts will be made to a wide range of domestic programs and the Pentagon budget over the course of nine years, set to start in 2013.

—Jeanine Skowronski is staff reporter for MainStreet. You can reach her by email at Skowronski.jeanine@thestreet.com, or follow her on Twitter at @JeanineSko.

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