Memo to GOP: Federal deficit shrinking at surprising rate, long-term debt stabilized for next decade #BlameObama


chart budget deficit shrinks 4 year low Steve Benen Maddow Blog Oct 2012

Another Republican talking point is biting the dust in a big way. Previously I posted U.S. budget surplus biggest in 5 years; federal deficit is down 32% so far this fiscal year and Congressional Budget Office: Federal budget deficit declining; $231 billion less than 2012 #BlameObama.

Now, the Los Angeles Times has two reports that buttress those. It's good news for President Obama and America, bad news for GOP whiners and obstructionists:

The federal deficit is shrinking more quickly than expected, and the government's long-term debt has largely stabilized for the next decade, the Congressional Budget Office said Tuesday in a report that could strengthen the Obama administration's hand in the budget battles with congressional Republicans. [...]

The deficit projection for this year — $642 billion — is almost 25% less than the deficit the budget office had forecast as recently as February. At the new level, the annual deficit would be back to where it was before President Obama took office. It would continue to fall for the rest of Obama's tenure, the budget office now projects.  [...]

By 2015, the budget office forecasts, the deficit will fall to just over 2% of GDP, a level that most economists would consider relatively insignificant.

What?! Why, that's positively unpatriotic! Here are the reasons for the shrinkage:

1. A better economy. Let's repeat that: A better economy.

2. The rate of medical inflation is slowing down — which reduces the cost of Medicare and Medicaid.

3. Congress approved higher taxes, remember? That was when the dreaded "fiscal cliff" was the topic du jour.

I appreciated this very clear, concise explanation of the deficit and debt:

The federal deficit is the gap between what the government spends each year and its revenue, mostly taxes. The government has run a deficit almost every year for the last half-century. The federal debt represents the accumulated money that the government borrows to cover that deficit. [...]

Underscoring the political dynamic, Republicans, who trumpeted news of higher deficits during Obama's first term, fell largely silent in reaction to the new figures.

 Of course they did. They always do when their political attacks get destroyed by pesky facts.

And then there's this, also from the L.A. Times:

American families reduced their debt load in the first three months of the year by 1%, bringing it down to pre-recession levels after an uptick in the last quarter of 2012, the Federal Reserve said Tuesday.

What a scandal!