Originally Posted by ISP James
the deficit is still relative to GDP. inflationary or not. you look at its a percentage.
for example. last year i earned x dollars but and saved y so i have Z% of my earnings saved.
this year i earned x1 dollars, saved y1, and i now have z1% of my earnings saved. its still a percentage.
the numbers are easily interpreted and used for the sake of comparing economic strength and growth if you want them to be.
You're thinking of DEFICIT as a percentage of GDP, when what is being discussed here is DEBT as a percentage of GDP.
Very common mistake.
Deficit - This year's shortage
Debt - Total outstanding loans