The incredible shrinking deficit!!
For years now the GOP has been telling everyone how our deficit and debt were at dire levels. With that said one would think when the CBO released a new report revising downward our deficits for the next 10 years, the GOP would have been happy and celebrating the news.
This of course is not what happened. The fact of the matter is no one from either party took credit for the large and historic decrease in our yearly deficits. There is an easy explanation for no one taking credit for the new CBO revision.
The reason for this is simply the fact that the speed at which our deficit is shrinking will have detrimental effect on our overall economy, thus slowing an already slow recovery. The amount of spending being cut through austerity type programs is causing higher unemployment. As these cuts are cutting jobs for police, firefighters, teachers and even government contractors. Along with other cuts to programs that the poor, elderly and disabled rely on, these cuts only slow recovery and lower consumer buying power.
The CBO says the U.S. deficit will shrink to 642 billion for 2013 down from 1.10 trillion a year ago. This is the smallest deficit since 2008. This year's deficit is projected at 4.0 percent of Gross Domestic Product (GDP) with it dropping to 2.1 percent of GDP by 2015 if the current trend of falling spending and rising revenues maintains its current track.
This shows for the time being our deficits are not a dire issue. We could spend some time on the real issues facing the U.S. like funding education and saving failing schools. Also, rehiring teachers who have been fired because of the massive cuts to education spending. Not to mention adding more police in an effort to increase school safety.
The CBO report was not all sunshine and butterflies though. As we're currently we are lowering deficits, by the end of the next 10 years our deficits will begin to rise. By 2023 our deficit will be 3.1 percent of GDP on an upward trend. This is mostly due to health care cost in programs like Medicare, related to an aging population.
So we must remain mindful of our spending, but we can be smart about how we attack our spending problems as opposed to making deep cuts to everything from the military to housing subsidies to even food stamps.
LINK TO THE CBO REPORT