U.S. Deficit Shrinking At Fastest Pace Since WWII

[UCmeNdc]

Last edited Thu Nov 22, 2012, 10:41 AM - Edit history (1)

Believe it or not, the federal deficit has fallen faster over the past three years than it has in any such stretch since demobilization from World War II.

While long-term deficit reduction is important and deficits remain very large by historical standards, the reality is that the government already has its foot on the brakes.



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Read More At IBD: http://news.investors.com/blogs-capital-hill/112012-634082-federal-deficit-falling-fastest-since-world-war-ii.htm#ixzz2CxalzyTO

[orpupilofnature57]

1. And like the other guy that was going to ruin the economy

raising taxes on the Rich is just what the doctor ordered for a Full recovery, even from the Tyranny of Shrub .

[Igel]

2. But it's not fiscal restraint.

It's largely the effect of a one-time boost to the deficit, the stimulus, combined with other things in 2010 that kept it high. One-time increases should be routinely factored out when looking at long-term trends. They're noise in the signal.

The Iraq war wound down on the schedule set in 2008 in spite of the US's best efforts to maintain a more robust presence in Iraq. While those savings aren't exactly a surprise, but they contribute.

Most of the rest is, oddly enough, (R) obstruction and the recovery. Revenues are at 2008 levels, finally. And there have been a series of continuing resolutions with few actual increases to baseline spending, so spending's been relatively flat. One exception to the flatness of the spending curve is Medicare/Medicaid, which increased faster than the CBO was forced to assume--much to nobody's surprise, including the CBO's and Congress'. It looked to be "on track" the first year because the recession suppressed medical spending. With the recovery, the ineptitude of the projections is fairly obvious.

There's also TARP-related weirdness. How disbursements and receipts of TARP money is accounted for varies. Treasury counts it as an expense and revenues, so it affects the deficit (increases the deficit when it's paid out; decreases the deficit when it's paid back--even if the reimbursement happens in a different year). CBO counts TARP-purchased assets as assets, so it doesn't increase the deficit; sale of TARP assets doesn't decrease it. Treasury's statement of deficits is final and officialm and boosts 2009 and 2010 #s. Again, this isn't baseline and should be footnoted and removed because, well, it's noise.

"High by historic standards" is laughable.

[NewJeffCT]

3. And, what Romney brought up in the debates over & over

was that Obama promised to halve the deficit... and, by the time Obama's fourth budget is done on 9/30/13, it may very well be close to half of Bush's last deficit of nearly $1.5 trillion

[PoliticalBiker]

4. Sombody 'splain it...

... to them stoopid republicrats!

In terms they can understand.

Colored Lego blocks might help...