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Thread: The Incredible Shrinking Budget Deficit

  1. #1
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    The Incredible Shrinking Budget Deficit

    http://www.businessweek.com/articles...budget-deficit



    The Incredible Shrinking Budget Deficit

    By Matthew Philips May 15, 2013

    The updated budget projections from the Congressional Budget Office show that the nation’s finances are healing much faster than anyone anticipated. Thanks to increased tax revenues, the budget deficit will shrink to $642 billion this year, or 4 percent of GDP. That’s the lowest aggregate deficit since 2008 and less than half the size of 2009′s deficit, which was 10.1 percent of GDP.

    The pace of the improvement is what’s most interesting. Since February, the CBO has knocked $200 billion off its deficit projection for this year, and $618 billion off its cumulative estimate for the next 10 years. All in three months. This is largely due to higher than expected tax revenues. Individual income tax receipts jumped by $69 billion, or 5 percent. Corporate tax receipts are now expected to be $40 billion higher, a 16 percent increase. Thanks to lower defaults, Fannie Mae also kicked in an extra $95 billion to the Treasury.

    Things should keep improving over the next couple years: By 2015 the deficit will fall to 2.1 percent of GDP. Even more impressive is that these adjustments aren’t a function of the sequester’s $85 billion in cuts, nor the tax increases Congress passed in January. Those were both baked into the CBO’s February estimates. This is just plain old organic growth of private sector tax receipts, which means that neither Congress nor the White House can take credit for this. (Which, of course, means that they will.)


    So while the conversation about the dire nature of America’s near-term finances hasn’t changed, the facts actually have.

    But don’t get too excited—the long-term problems are still scary. As a large portion of the 76 million baby boomers pour out of the workforce over the next 10 years, entitlement spending goes parabolic and begins to eat up more and more of the federal budget. Not to mention that interest payments on the debt will double as a share of GDP over the next 10 years, from 1.45 percent to 3.2 percent in 2023.

    There are slight improvements in the new estimates. The CBO says that between 2014 and 2023, Social Security spending will be 1 percent lower than first projected, Medicare will be 1.2 percent lower, and Medicaid will be 2 percent lower. So while we’re certainly not Greece, we’re also not out of the woods.


    The real danger now is that a rosier short-term deficit picture throws water on an already cooling debate over the country’s long-term deficit problems. It took Congress strapping a self-made time bomb to the economy for it finally to agree to some modicum of deficit reduction in January. For now, the pressure is off entirely. That’s the bad news.

  2. #2
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    LMAO. I love spin.

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    Yay. We are only spending $642B more than we take in.

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    Quote Originally Posted by DDNYjets View Post
    Yay. We are only spending $642B more than we take in.
    And When the Bush administration was leading the country what was your opinion then?

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    Quote Originally Posted by Buster View Post
    And When the Bush administration was leading the country what was your opinion then?
    Bush was also a crappy tyrant.

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    Quote Originally Posted by Buster View Post
    And When the Bush administration was leading the country what was your opinion then?
    As far as I am concerned Bush was a liberal.

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    Quote Originally Posted by DDNYjets View Post
    As far as I am concerned Bush was a liberal.
    so he did not get your vote?

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    Quote Originally Posted by Buster View Post
    so he did not get your vote?
    If I was old enough to vote he would have. Kerry is a kept man and basically a traitor. I am not in love with Bush but at least I knew where he stood.

    My first vote was in 2008 and I drank the kool aid. Never again!

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    Quote Originally Posted by DDNYjets View Post
    If I was old enough to vote he would have. Kerry is a kept man and basically a traitor. I am not in love with Bush but at least I knew where he stood.

    My first vote was in 2008 and I drank the kool aid. Never again!
    I thought you were a dinosaur. You know extinct. A Young comservative. How refreshing. When my daughter went to UNC I joked with her to run for class president of the young republicans club. She would have no competition.

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    Three things

    1. It's not parabolic, a parabola comes back at you like a circle.

    2. A deficit means you are spending more than you have.

    3. We owe 17 trillion in debt; how do we pay that off. Interest rates will eventually go up as we are printing money.
    Last edited by RMJK; 10-23-2013 at 11:41 AM.

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    After seeing what the Obuttocks administration is doing to Chase and Dimon, would anyone in the private sector, in their right mind, publish anything negative about this craptastic group of thugs?

    Consumer Reports better watch their backs!

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    Quote Originally Posted by southparkcpa View Post
    I thought you were a dinosaur. You know extinct. A Young comservative. How refreshing. When my daughter went to UNC I joked with her to run for class president of the young republicans club. She would have no competition.
    LOL. There are plenty of us. Problem is very few are politically active and they are force fed liberal ideology in college. Took me a about a year in the real world to wake the fvck up.

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    Quote Originally Posted by DDNYjets View Post
    If I was old enough to vote he would have. Kerry is a kept man and basically a traitor. I am not in love with Bush but at least I knew where he stood.

    My first vote was in 2008 and I drank the kool aid. Never again!

    whoa! I though you were older than me (52)

  14. #14
    LOL!

    Another: "we're spending less than we might have spent so we're saving money!" analysis. Let's be clear. The deficit isn't shrinking until the total amount of debt owed by the US starts going Down.

    Our debt going up less slowly than anticipated is not a shrinking deficit.

    Having less debt as a ratio of GDP is not a shrinking deficit.

    And for the record, yes: Bush was a terrible president from a fiscal standpoint. The fact that Obama has managed to be so much worse is truly astounding.

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    Quote Originally Posted by DDNYjets View Post
    LOL. There are plenty of us. Problem is very few are politically active and they are force fed liberal ideology in college. Took me a about a year in the real world to wake the fvck up.

    Where did you go to college?

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    Quote Originally Posted by southparkcpa View Post
    Where did you go to college?
    NCC then Binghamton.

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    Quote Originally Posted by quantum View Post
    whoa! I though you were older than me (52)
    Haha. When it comes to politics I am very old-fashioned. Guess I haven't "evolved" yet.

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    Quote Originally Posted by DDNYjets View Post
    Haha. When it comes to politics I am very old-fashioned. Guess I haven't "evolved" yet.
    sounds like you've already grown up. maybe you can help Busterbot...

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    Quote Originally Posted by DDNYjets View Post
    NCC then Binghamton.
    Kool. SUNY B is a very good school.

  20. #20
    The budgeting process has not yet factored in the real cost of Obamacare. Still one would expect the deficit to go down when the GOP has succeeded in blocking most of Barry's agenda since 2010 while simultaneously getting us the sequester which was a nice win for small government folks. Pair that with Barry's tax hikes and it's good for the budget. The article does point out correctly that the real Republic crushing problem is around the corner though with trillions in unfunded entitlements ready to hit us with the boomer's retiring.

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