Lets hope the obstructionists don't screw this up!!!
Deficit Shrinks to 5.7% of GDP as Debt Ceiling No Vote Risks All
By Mike Dorning - Aug 6, 2013 12:01 AM ET
As congressional Republicans prepare to risk a government shutdown or U.S. debt default over the budget, one economic indicator undercuts the urgency for a showdown: The deficit is steadily shrinking.
The federal budget deficit narrowed from more than 10 percent of the gross domestic product at the end of 2009 to 5.7 percent of GDP for the 12 months ended March 31 -- the smallest gap in four years, according to data compiled by Bloomberg.
With tax collections rising and spending growth slowing down, the deficit is on track to drop to 4 percent of the $16 trillion U.S. GDP for the fiscal year ending Sept. 30, according to a May forecast by the Congressional Budget Office. It will shrink to 3.4 percent of GDP next year, the CBO says, close to the 3.3 percent average over the past 30 years, according to Bloomberg data.
“When you look at the 10-year projections for the deficit and debt as a percentage of GDP, it’s not an issue,” said Jim O’Sullivan, chief U.S. economist for High Frequency Economics in Valhalla, New York.
At the same time, should House Republicans carry out a threat to default on U.S. debt, even if only for a day or two, “you’d never be able to reverse that,” O’Sullivan said. “You’d probably always have a little bit of an extra premium” that investors would demand on U.S. obligations.
more@ Bloomberg.com
DO SOMETHING!
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