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Thread: Deficit Decreases!

  1. #1
    Senior Member Gerry Clinchy's Avatar
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    Default Deficit Decreases!

    The deficit has dropped precipitously over the last year as Mr. Obama’s stimulus spending subsided, the economy improved, and the tax increases and spending cuts agreed to since 2011 have begun to bite.

    Foremost among those tax increases was the expiration of the payroll tax cut, which funds Social Security.


    Meanwhile, the key spending cuts have come via the budget sequesters, which are automatic across-the-board trims that kicked in last year.


    The next round of sequesters is slated to take effect on Jan. 15, but negotiators are trying to work out a deal to restore some of that spending, which could reverse some of the progress, depending on how they write the agreement.

    Read more: http://www.washingtontimes.com/news/...#ixzz2mlRNQI6l

    And if we could cut the fraud and waste, the picture could be even better.
    G.Clinchy@gmail.com
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    This is old news Gerry. Here is a forbes article from February. http://www.forbes.com/sites/rickunga...lly-shrinking/

    Funny, but your article fails to mention that the deficit started going down long before the sequester kicked in and because some tax cuts were not renewed. Yep it is all about the spending...


    Too bad Romney was not in office to claim all the credit.

  3. #3
    Senior Member Gerry Clinchy's Avatar
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    I noted this in your article Henry:
    “Compared to the size of the economy, the deficit in 2013 is much lower than in 2009, when Obama took office. The deficit will be 5.3 percent of gross domestic product this year, nearly half the 10.1 percent of GDP in 2009.”


    The improvement in the deficit as measured against GDP is the direct result of the deficit falling to $845 billion for fiscal year 2013—a $300 billion improvement over the previous year. And the positive trend is projected to continue though the next fiscal year where the the annual budgetary deficit will fall again to $430 billion.
    It would seem that some of the deficit reduction would have been a result of the Iraq withdrawal?

    What is confusing, too, is that if the annual deficit decreased over this time, why did the overall debt increase so dramatically? Shouldn't we have also seen a less rapid growth of the overall deficit?

    What’s more, the CBO projects that the good news will—if we remain on our current trajectory—turn negative in fiscal year 2015 and begin climbing once again unless we do something to cut spending, increase revenues or find some combination of the two.
    I do like Rand Paul's idea of a "Penny Reduction" ... just 1 penny decrease of EVERY $1 spent in EVERY area. For example, that means if a family is getting $400 in SNAP, it would be reduced by $4. If the WH budget is $40,000,000, (I do not know what the WH budget is, just picked this # out of the sky), it would mean losing $400,000. Such a reduction would be even less than sequester, but if sustained would make a difference.
    G.Clinchy@gmail.com
    "Know in your heart that all things are possible. We couldn't conceive of a miracle if none ever happened." -Libby Fudim

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    Quote Originally Posted by Gerry Clinchy View Post
    I noted this in your article Henry:

    It would seem that some of the deficit reduction would have been a result of the Iraq withdrawal?

    What is confusing, too, is that if the annual deficit decreased over this time, why did the overall debt increase so dramatically? Shouldn't we have also seen a less rapid growth of the overall deficit?



    I do like Rand Paul's idea of a "Penny Reduction" ... just 1 penny decrease of EVERY $1 spent in EVERY area. For example, that means if a family is getting $400 in SNAP, it would be reduced by $4. If the WH budget is $40,000,000, (I do not know what the WH budget is, just picked this # out of the sky), it would mean losing $400,000. Such a reduction would be even less than sequester, but if sustained would make a difference.
    It's so easy to mislead with statics when dealing with such large numbers.

    If take in 100k in taxes and spend 110k your deficit is 10k and you are 10k further into debt. Next year the scenario could be the same but you spent only 109k. You are still into debt 9k further but have cut your deficit by 10%.

    Now in the second year if your tax receipts would go up to 200k. You could spend 215k, which increases debt 15k (50%} and still claim you lowered the deficit (25%). You would leave out that it was being compared to a percentage income (tax receipts).

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