DEFICIT SHRINKS FROM LAST YEAR'S RECORD.... Deficit hawks probably won't be pleased with the total, but they should at least be pleased with the direction.
The federal government budget deficit shrank in fiscal 2010, but the big gap was only $122 billion lower than the record high set a year ago.
The U.S. spent $1.294 trillion more than it collected in the fiscal year that ended Sept. 30, the Treasury Department said Friday.
The deficit amounted to 8.9% of gross domestic product. That's down from fiscal 2009, when the deficit of $1.416 trillion was 10.0% of GDP.
Spending fell and revenues rose in fiscal 2010 as the economy recovered from the deep recession that contributed to the nation's troubled fiscal condition.
If this sounds familiar, it's because the Congressional Budget Office reported on its estimate of the federal budget deficit for FY2010 would just last week. Today's Treasury report is the official deficit tally, though as it turns out, the CBO projection was almost on the nose.
The $1.294 trillion shortfall is smaller than last year's total; it's slightly lower than the deficit President Obama inherited from his predecessor; and the final figure was smaller than projections made by the administration and the CBO earlier this year.
Want to have some fun? Ask your favorite Tea Partier whether the deficit they claim to care so much about is higher or lower now than when Obama took office. They won't care for the answer, but it's true.
What's more, as Stan Collender recently noted, the $122 billion improvement on the deficit "is the biggest one-year nominal drop in the deficit that has ever occurred." We probably won't see headlines blaring, "U.S. achieves biggest one-year deficit reduction in American history," but that just happens to be the case.
read full article:
http://www.washingtonmonthly.com/archives/individual/2010_10/026151.php
by: Steve Benen
----------------------pop quiz----------------------------------------------
Which of the following will make up a majority of the deficit in the next decade?
A) Social Security
B) Medicare
C) The National Park Service
D) PBS
E) George Bush's tax cuts
Give up? The answer is E -- George Bush's tax breaks for the rich.
Of course the Debt Commission focussed all its concerns on A), B),C), and D). They would rather turn Medicare into a voucher system, surrender "fair and balanced" news reporting to Fox News, decimate the National Park System and have working Americans drop dead on the job from old age.
One should also note that in the very first quarter that President Obama was in office, the effects of the stimulus began to reverse the free fall he inherited from George W. Bush. In the ending of George W. Bush's Great Recession, we see the same pattern repeated: Republicans cause recessions, Democrats clean them up (see History of Recessions).
