Deficit Hawks, Rejoice! We’re in a Golden Age of Deficit Reduction

[DonViejo]

by Daniel Gross Apr 10, 2013 7:05 PM EDT

There’s been no grand bargain. And you’ll never get deficit hawks to admit it. But in four years Obama has presided over a remarkable deficit reduction, says Daniel Gross.

This is the Golden Age of deficit reduction. Really.

You wouldn’t know it if you listen to the professional deficit hawks, who have plowed hundreds of millions of dollars and countless op-eds into a fruitless effort to drive a grand bargain on taxes and spending. But it is. Policy is nobody’s idea of optimal. But nonetheless the gridlock of the last few years has produced spending restraint and higher tax rates. President Obama has proposed more of both in the budget he released on Wednesday. The sequester has just kicked in. And sustained economic growth, the miracle deficit cure, continues to work its magic. The expansion is now in its 46th month.

While the national debt mounts, I’ve noted that the primary deficit—the annual mismatch between revenues and expenditures—is melting away. Check out the March Treasury Monthly Statement, which was released Wednesday. In March 2013, the government collected $186 billion in revenues and spent $292.5 billion, for a deficit of about $106 billion. Pretty bad. But in March 2012, revenues were substantially lower and spending was significantly higher. Then, revenues were $171.2 billion and spending was $369.37 billion, for a deficit of $198 billion. From last March to this March, revenues rose 8 percent while spending fell 21 percent, and the monthly deficit shrunk 46 percent.

Now, monthly numbers can move around—if a big tax payment comes in on March 31 one year and arrives on April 1 the next year, or if a benefits payment that went out on March 1, 2012, instead went out on Feb. 28, 2013. So it’s useful to look at the trend. The fiscal year is now six months old. And guess what? It shows more deficit melting. Through the first six months of this fiscal year, revenues are $1.196 trillion, up 12.5 percent from $1.063 trillion in the first six months of fiscal 2012. Meanwhile, the government has spent $1.797 trillion in the first six months of fiscal 2013, down 2.4 percent compared with the first six months of fiscal 2012. The deficit for the first half of the fiscal year is $600.5 billion, down 22.5 percent from $775 billion in the first half of fiscal 2012.

more:
http://www.thedailybeast.com/articles/2013/04/10/deficit-hawks-rejoice-we-re-in-a-golden-age-of-deficit-reduction.html