Deficit falls to $680 billion, less than half what it was 4 years ago.

The government says the deficit for the 2013 budget year totaled $680.3 billion, down from $1.09 trillion in 2012.

Revenue jumped 13.3 percent to $2.77 trillion, reflecting a slightly better economy and higher tax rates. And government spending declined 2.4 percent to $3.45 trillion, in part because of across-the-board spending cuts that took effect in March.

http://swampland.time.com/2013/10/30/u-s-budget-deficit-down-to-680b-lowest-in-5-years/

The US deficit has fallen to $680 billion, officially, less than half of what it was four years ago, fulfilling an Obama promise that just a year ago few would have predicted we would achieve.

That is approximately $420 billion less than it was in 2012, easily dwarfing that year's then record $207 billion decline.

Revenues of $2.77 trillion equate to 16.6% of GDP at the end of 2dQ2013. That is much improved over the mid-14% to 15% ratios we were seeing in the last four years, though still well into the lower half of ratios over the past several decades, and still three percentage points below the 19.7% ration achieved in 2000, when the Govt had a surplus budget. 3 percentage points represents almost $1/2 trillion dollars in today's $16.6 trillion economy.

Obviously, increasing that revenue ratio would help to further lower the deficit.

On the spending side, spending of 3.45 trillion represents 20.7% of GDP, well down from the 24.4% figure hit in 2009. 20.7% is in the upper half of ratios over the past several decades, but is lower than the ratio in 6 of the 8 year Reagan was president, and lower than 9 of the 12 Reagan/Bush1 years.

The total deficit is 4.1% of GDP. That is also far better than the 9.8% ration hit in 2009. The ratio has declined every year since Obama has been in office. 4.1% of GDP is getting close to achieving a level of debt stability -- where the overall economy is increasing as fast as the overall debt, so that debt is not growing relative to the size of the economy.

IMO we are not where we need to be yet. While getting into another surplus situation would be the ultimate goal, we need at least to continuing moving to where the deficit is down to the point where the debt is growing more slowly than GDP, and thus shrinking relative to GDP. This was the general stated for the decades following WWII, but since 1981, with the exception of the last half of the 1990s, that ration has been increasing. Dramatically so in the first couple years of the Great Recession.

However, we are no longer at the point where drastic spending cuts are warranted because of the deficit. Spending in total dollars is now lower than it was 4 years ago. Nothing like this has ever happened in modern history. While there was indeed a spending spike because of the recession, 4 years of flat spending has meant that increasing Govt spending has not been present to help juice economic growth in a slack economy, and most economist would agree that economic growth has slowed because of it.

We don't need further spending cuts that harm our economy. We need to lower spending in proportion to GDP, but this can be achieved by holding spending growth to lower than GDP growth -- which is what happened in the 1990s where spending was never cut in any year, but spending in proportion to GDP fell steadily.

 

"The US deficit has fallen to $680 billion, officially, less than half of what it was four years ago..."

Taxcutter says:
But 50% higher than FY2008 which was GW Bush's last full year.

In constant dollars Hussein Obama's tenure has seen five of the six highest deficits of all time. Only 1943 (in the middle of the biggest war of all time) was in the top six.

 

2009 was Bush's last year. The deficit was running well over a trillion dollars before Obama took office and was soon projected to be $1.9 trillion.

It is simply rank partisanship to simply blame the president for the deficits he inherited and which were generated because of the Great Recession he also inherited.

So yes, you can point out that because of the mess he inherited, the deficits have been amongst the highest. But then if you have an ounce of objectivity you also have to acknowledge that the deficits he inherited have falling the greatest amounts.

 

The deficit as of January 2009, before Obama took office, was projected to be $1.2 trillion.

 

One month of FY 2009 was GW Bush. Eleven-twelfths of it belong to Hussein Obama.

 

False.

 

Completely ignoring the fact that Bush's policies continued well into Obama's term. 2 of the largest contributors to the deficit at the time were Medicare Part D and the War in Iraq.

Obama ended the war and with Obamacare he funded Medicare Part D so we weren't borrowing money to pay for it anymore.

 

Don't listen to this garbage. The government says this and you believe them? The deficit didn't go down, it went up as usual.

 

This is the section you want: http://www.politicalforum.com/forumdisplay.php?f=63

 

Conservatives can't admit anything positive about the Obama administration. It would cause them to have an aneurysm or something.

Yea on the deficit going down (even if I don't agree with all the things that were done to make it go down; our austerity policies and sequester cuts have hurt on the job front. I'd take less of a deficit reduction in trade for more stimulus spending and more jobs, because jobs are what will bring in the revenue long term)

 

Spending for FY 2009 was $3.52 trillion (including the stimulus plan).
Spending for FY 2010 was $3.5 trillion
Spending for FY 2011 was $3.6 trillion
Spending for FY 2012 was $3.4 trillion.
Spending for FY 2013 was $3.45 trillion.




Spending for FY 2008 was $2.9 trillion.

 

Thanks to republicans. Bottom line.

 

A big part of the $420 billion lower deficit is because tax revenues increased $320 billion over last year.

But funny, I don't recall Republicans supporting raising tax revenues. I remember them fighting it every inch of the way. In fact, I remember them nominating a candidate who threated to slash taxes even more, mostly for the benefit of multi-millionaires like himself.

Instead, we saw taxes increase and revenues jump.

Thanks to Democrats. Bottom line.

 

Four straight years of flat or declining spending isn't going to be a really GDP pumper, is it?

Compare:

(fiscal years)
Reagan
Spending increase, 1981-1985: +39.5%.
Total Government employment, 1981-1985: +607,0000

Bush
Spending increase, 2001-2005: +32.7%
Total Government employment, 2001-2005: +603,000

Obama
Spending increase, 2009-2013: -1.9%
Total Government employment, 2009-2013: -667,000

 

Looks like the government shut down really did help the bottom line...

 

Pulling the troops out of Iraq, and down sizing in Afghanistan has lowered the deficit. I don't see the deficit going much lower, and by cutting more spending and increasing tax revenues will only worsen the economy. And unless we start seeing a budget surplus we will not be able to pay off the national debt which is the biggest monkey on our government's back. I really do not see how our government will get us out of the financial debt they got us into.

 

Average spending as a percentage of GDP during the Reagan admnistration was 22.2. In FY12, spending as a percentage of GDP was 21.5. If it was good enough for Reagan . . .

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The shutdown was a FY14 event and has nothing to do with FY13 spending (though, shutdown preparations probably increased spending).

 

So the sequester is working? So when the government spends less, the economy continues to grows which brings in more money to the government, which lowers deficit spending from both sides. I guess those crazy tea partiers are right?

 

The budget deficit was blown out by the one time Government expense of TARP. Almost all of that money was paid back during Obama's term and if it wasn't for Obama's stimulus the budget deficit would of been back to 2008 levels (450 bil) plus the lost revenue (400 bil) because of recession.

The budget deficit for 2010 should have been 850 Billion. Barack blew it out to 1.4 trillion and then pretended that 2009 was some new baseline to be measured against. Only Barack can get away with writing a check for 800 Billion to his friends and then claim he didn't spend any money.

 

And more specifically, the TEA party who is trying their best to slow this madness.

 

That will vaporize when Obama Care starts handing out subsidies.

 

You keep using this 2009 inflated spending number as your baseline. Why? TARP and stimulus were supposed to be one time expenses.

So, he writes a check for 800 billion in year one, claiming it is a one time expense, and then writes a slightly smaller check the next year. That is the new "spending less" definition?

 

Coincidentally, isn't that $680 billion what they spent on Healthcare.gov ?


Anyway... way to dig and find something positive from this administration!

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Those 19 days in 2009 aren't really much of a "year".

Please tell me you agree.

 

NOPE! ¾ of the year 2009 was STILL Bush's deficit. . .as it was his budget, and it was his bailout!

 

It's comical how right-wingers think Bush's responsibility for the spending in 2009 ended the day he left office. It doesn't work that way.