http://www.econbrowser.com/archives/201 ... g_aga.htmlhttp://www.propublica.org/article/how-b ... eal-fix-it
The 2012 deficit was actually the smallest one since 2008.
As Binyamin Appelbaum noted in The New York Times, the federal government has run a deficit in 45 of the last 50 years. (The exceptions were 1969 and 1998 through 2001.) The financial crisis in 2008, however, caused the deficit to skyrocket, as tax revenues fell because of the slump in incomes and production, and government spending on the stimulus and safety net measures such as unemployment insurance shot up. The deficit for the 2008 fiscal year was $455 billion. In 2009, it surged to more than $1.4 trillion.
Since then, the deficit has been falling, albeit very slowly. The government took in 6.4 percent more in taxes in 2012 than in 2011, as the economy improved a bit and several tax breaks expired. And it spent less on Medicaid, unemployment insurance and the continuing operations in Iraq and Afghanistan.
At least we're not Greece. How much longer can we keep borrowing?
That's a tough one. Some commentators — including Paul Krugman, the Nobel-winning economist and columnist for The New York Times — have argued that our current deficits are mostly a product of the sluggish economy.
So with growth of GDP playing such an important role in allowing the Debt to GDP to continue to drop, who thinks the sequester is going to save us a dime vs increasing the Debt to GDP ?
Currently, debt to gdp is dropping. Some economists saying anything over 90% adds additional drag on the economy so I would think our main goal right now should be getting it under that.
Debt will always go up. That isn't the issue. The issue is when it is growing faster as a percent than the GDP is growing. Is spending really our biggest issue right now or is it jobs and demand ? Do we need to get the cars engine running more smoothy first so it can run on its own or should we drain the tank of gas and pull off the jumper cables ?
Will the sequester increase debt to gdp or decrease it ?