NOW can we start spending some money to fix the nation?
Since the recession ended four years ago, the federal budget deficit has topped $1 trillion every year. But now the government's annual deficit is shrinking far faster than anyone in Washington expected, and perhaps even faster than many economists think is advisable for the health of the economy.
That is the thrust of a new report released Tuesday by the nonpartisan Congressional Budget Office, estimating that the deficit for this fiscal year, which ends on Sept. 30, will fall to about $642 billion, or 4 percent of the nation's annual economic output, about $200 billion lower than the agency estimated just three months ago.
The agency forecast that the deficit, which topped 10 percent of gross domestic product in 2009, could shrink to as little as 2.1 percent of gross domestic product by 2015 — a level that most analysts say would be easily sustainable over the long run — before beginning to climb gradually through the rest of the decade.
That’s pretty remarkable. The deficit hasn’t been this low since Fiscal Year 2007, which was also Bush’s lowest deficit, half a trillion dollars.
You read that correctly: Bush’s deficits never once were below $500 billion (Clinton’s last budget did run a deficit of $100 billion, which slopped over into Bush’s first year in office.)
So much for tax cuts stimulating the economy. So much, moreover, for the silly sham that budget deficits are killing us.