According to a new government estimate, the budget deficit for the current year will come in well below what was projected just a few months ago, in fact, $200 billion below its February estimate, which makes this the smallest annual shortfall since 2008.
The Associated Press reports, “The Congressional Budget Office study predicts a 2013 budget deficit of $642 billion.”
The CBO points to tax revenues and better-than-expected bailout repayments by mortgage giants Fannie Mae and Freddie Mac are the key reasons for the improved outlook.
The AP further states, “The deficit picture is expected to continue to improve next year and beyond, with the 2015 deficit now projected at $378 billion, just 2.1 percent of the economy.”
Moody’s Analytics chief economist Mark Zandi said, “It’s excellent budget news.” Zandi said the shrinking deficit “highlights the upside from the fiscal austerity. The stock market’s likely also helping to juice tax revenues.” But, he said, “the much lower deficit for this year represents a gamble with aggressive fiscal austerity. So far, so good, but the script is still being written as tax hikes and spending cuts are still being implemented.”
I can feel the angst and inevitable gnashing of teeth among Republicans who called for painful cuts, while touting austerity measures which have failed miserably in Europe. The Paul Ryans who claim that Obama is a spendthrift, while at the same time the economy has been healing — albeit slowly at times — under the Obama administration.
Now if we can just focus on the economy, jobs, and other important issues such as education instead of conspiracy theories, then we’ll be good to go.
Good news H/T: Spy Guy, FreakOutNation admin @ComgenKDT