The deficit continues to fall. Unemployment continues to stagnate

[Direckshun]

Which is what happens when you enact tons of deficit reduction legislation in your first four years.

Your deficit falls, and your recovery stagnates. You can't cut that much deficit this quickly and expect unemployment to magically improve.

The President has now cut the deficit by half a trillion dollars so far in his Presidency. And now, all those rosy predictions about a strong decline in unemployment in 2014 are now largely shuttered, as the CBO is predicting unemployment to remain at 7.5% through 2014, under current policy.

This is a mess.

We made a choice as a nation. We could continue temporarily borrowing at basically a zero-percent interest to get our economy back on track, or we could cut down on our borrowing to languish in what could become a lost decade.

Extreme austerity measures have done Europe no favors, and the United States has ended up in better position out of the financial crisis because we enacted stimulatus spending, which is what you freaking do to get out of a recession.

We have chosen to languish.

http://thehill.com/blogs/on-the-mone...ficit-for-2013

CBO projects $845B budget deficit for 2013
By Erik Wasson
02/05/13 01:00 PM ET

The Congressional Budget Office on Tuesday projected a federal budget deficit of $845 billion in 2013, the first time it has fallen below $1 trillion under President Obama.

The reduction in the budget deficit comes after Congress approved higher tax rates on households with annual income above $450,000. But the long-term forecast from the non-partisan CBO shows the fiscal cliff deal that prevented higher tax rates on most households did little to help the nation’s long-term budgetary outlook.

CBO sees the deficit falling to $430 billion by 2015 before slowly rising again. By 2023, CBO projects the nation will be nearing the $1 trillion mark with a $978 billion budget deficit as the aging population and rising health costs explode entitlement spending.

CBO also projects weak economic growth for 2013 and a high unemployment rate above 7.5 percent through 2014 in its annual fiscal outlook published on Tuesday. That would mark the sixth straight year with a jobless rate above 7.5 percent, the longest stretch in 70 years.

CBO sees the economy growing at a weak 1.4 percent rate in 2013. It says that growth would be 1.5 percentage points greater if automatic spending cuts known as the sequester were turned off, if a 2 percentage point payroll tax break were reinstated and if tax increases instituted last month on wealthier taxpayers were voided.

The House and Senate point persons on the budget offered typically disparate reactions to the CBO report.

House Budget Committee Chairman Paul Ryan (R-Wis.) said the CBO report shows that the country is still on the path to a debt crisis and needs to get serious about spending cuts now.

“The CBO’s report is yet another warning that we need to get spending under control. The deficit is still unsustainable. By 2023, our national debt will hit $26 trillion. We can’t let that happen," he said. Ryan noted that President Obama is late in producing his budget for 2014.

“House Republicans have offered their solutions. Now the President and Senate Democrats must do the same," he said.

Senate Budget Committee Chairman Patty Murray (D-Wash.) said the CBO economic forecast shows more needs to be done to stimulate growth.

“Today’s CBO outlook confirms that the economic recovery remains fragile and we can’t afford to lose focus on job creation and economic growth," she said. “The outlook also highlights the danger to the economy if sequestration takes effect as scheduled on March 1st. It’s clear that sequestration is an irresponsible way to reduce the deficit, and I hope that Republicans are truly willing to work with us on a balanced and bipartisan replacement that doesn’t place the entire burden on the middle class and most vulnerable families and that calls on the wealthy to pay their fair share.”

Automatic spending cuts known as the sequester are set to begin in March, though Obama on Tuesday urged Congress to prevent most of them.

Economists at CBO do see the economy rebounding strongly in 2014 with 3.4 percent growth. Unemployment would get down to 5.5 percent by 2018, CBO says.

The 2013 growth numbers are rosier than those CBO projected in August when the fiscal cliff loomed and CBO saw the economy contracting by 0.5 percent in 2013.

CBO estimates the government will add $6.96 trillion in deficit spending over the next ten years under current law.

The fiscal cliff deal added $3.9 trillion in deficits over the next ten years, CBO said.

The CBO has projected budget deficits below $1 trillion under Obama before, but only if all of the Bush-era tax rates were allowed to expire. Assuming those tax hikes, for example, the CBO last year projected the deficit would fall to $641 billion. Such a scenario was unlikely, however, given opposition from Obama and Republicans in Congress to raising taxes on the middle class.

The CBO budget baseline, which will form the yardstick used by lawmakers during coming fiscal debates this year, assumes that nearly $1 trillion in automatic spending cuts over nine years is allowed to take place and that a radical cut to doctor payments under Medicare is allowed to occur, among other assumptions.

Assuming Congress simply turns off the sequester cuts and passes a “doc fix” without paying for it, among other actions, would add a total of $9.5 trillion in new deficits over ten years.

[Direckshun]

[Prison Bitch]

So you like the job the GOP has done since 2010?

[Bewbies]

I'll eat your boogers if the deficit is "only" 845 billion in 2013.

[Direckshun]

[Direckshun]

http://www.calculatedriskblog.com/20...=Google+Reader

CBO: Deficit to decline to 2.4% of GDP in Fiscal 2015
by Bill McBride
on 2/05/2013 03:36:00 PM

The Congressional Budget Office (CBO) released their new The Budget and Economic Outlook: Fiscal Years 2013 to 2023.

From the WSJ: CBO Sees Rising U.S. Debt, Economic Rebound in 2014

Economic growth and recent legislation have cut the federal budget deficit in half in the past four years ... the Congressional Budget Office said Tuesday in the annual update of its budget and economic forecast.

The CBO said it expected economic growth to be sluggish in 2013, in part because of a sharp drop in government spending, but it sees a better economy in 2014 as the recovery takes hold.

The federal deficit for the fiscal year ending Sept. 30, 2013, is projected to fall to $845 billion, or 5.3% of gross domestic product, said the CBO, which produces nonpartisan reports on the budget and economy for Congress. That is down sharply from the past four years, which each had deficits exceeding $1 trillion. The 2012 deficit amounted to 7% of GDP.

The CBO projects the deficit will decline to 3.7% of GDP in fiscal 2014, and 2.4% of GDP in fiscal 2015.

This graph shows the actual (purple) budget deficit each year as a percent of GDP, and an estimate for the next ten years based on estimates from the CBO.

The CBO deficit estimates are even lower than my projections.

After 2015, the deficit will start to increase again according to the CBO, but as I've noted before, we really don't want to reduce the deficit much faster than this path over the next few years, because that will be too much of a drag on the economy.

[Amnorix]

Why are you ignoring this sentence in your own OP?

CBO sees the deficit falling to $430 billion by 2015 before slowly rising again. By 2023, CBO projects the nation will be nearing the $1 trillion mark with a $978 billion budget deficit as the aging population and rising health costs explode entitlement spending.

[loochy]

This is an alarming trend.

[Direckshun]

Originally Posted by Amnorix

Why are you ignoring this sentence in your own OP?

Because my point is that we are recoverying from a recession now, and embracing deficit reduction instead of economic stimulation policies now.

[BigRedChief]

Originally Posted by Direckshun

Because my point is that we are recoverying from a recession now, and embracing deficit reduction instead of economic stimulation policies now.

The vast majority of economists say we should be doing stimulus now, not worrying about the deficit

[blaise]

We need to spend as much as it takes to make Obama look good now.

[donkhater]

Why would this surprise anyone? When our government has a facist relationship with the private sector, any lowering of spending on their behalf will hurt the economy. This is great 'statistics' for those in this forum addicted to the narrative that the government is our mommy, but for those who actually think the bureaucrats in Washington have zero clue on what's best for the economy and only looking out for THEIR interests, it is expected and entirely predictable.

As government becomes even MORE broke, the worse it will get. Time to break the two-way embilical cord.

[Direckshun]

Originally Posted by BigRedChief

The vast majority of economists say we should be doing stimulus now, not worrying about the deficit

Bingo.

[Direckshun]

Originally Posted by donkhater

Why would this surprise anyone? When our government has a facist relationship with the private sector, any lowering of spending on their behalf will hurt the economy. This is great 'statistics' for those in this forum addicted to the narrative that the government is our mommy, but for those who actually think the bureaucrats in Washington have zero clue on what's best for the economy and only looking out for THEIR interests, it is expected and entirely predictable.

As government becomes even MORE broke, the worse it will get. Time to break the two-way embilical cord.

I hope you left breadcrumbs on the ground to lead you back to reality.

[Garcia Bronco]

845 Billion instead of a trillion deficit projection?!?!?

Great news. That means we won't have a 20 trillion dollar deficit as soon as we thought.