4. Deficit reduction was identified as the major issue facing the United States as of the writing of this chapter.

a. Go to the most recent Economic Report of the President to ascertain whether deficits as a percent of GDP have increased or decreased compared to what was expected for 2011 and 2012 as of the writing of the chapter.

b. Calculate the total change in the deficit as a percent of GDP between 2011 and most recent data. Now split the change in the deficit since 2011 into (1) the changes in tax revenue as a percent of GDP, (2) the change in expenditures as a percent of GDP.

c. Use the data entitled Economic and Financial Indicators found in The Economist to find the country with largest budget deficit and largest budget surplus. In this list the budget deficit is called the “Budget Balance.” Then find the OECD member in this list with the largest budget deficit and largest budget surplus.