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World Traveler
Joined: 29 May 2009
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 Posted: Sat May 04, 2013 7:39 am Post subject: US expects first cut in debt since 2007 |
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| The US Treasury expects to pay down debt in the second quarter of 2013 as the budget deficit that has dominated national politics starts to shrink. |
http://www.ft.com/cms/s/0/9594f870-b113-11e2-9f24-00144feabdc0.html?ftcamp=published_links%2Frss%2Fglobal-economy%2Ffeed%2F%2Fproduct#axzz2SL1zUUSg
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the return to one quarter a year of debt repayment highlights how aggressively the US has cut the deficit this year, despite concerns about growth and political wrangling over tax and spending decisions.
Nominal spending is basically unchanged since the final quarter of 2010, one of the longest periods of restraint in postwar US history. Meanwhile, tax revenues have picked up with the economic recovery, and the expiration of a payroll tax break at the start of the year is adding about $10bn a month to revenues.
�The paydown this quarter � the first since 2007 � is emblematic of the turn in budget finances from horrible, to grim on their way to steadily better,� said Eric Green, chief economist at TD Securities in New York. |
Some good news. Things in the U.S. are getting better. |
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rollo
Joined: 10 May 2006
Location: China
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| Posted: Sat May 04, 2013 3:12 pm Post subject: |
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| stock market up. The housing market if moving again, more construction and prices rising. employment growing. the dollar is dominant. Starting to pull out of the recession. |
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TheUrbanMyth
Joined: 28 Jan 2003
Location: Retired
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| Posted: Mon May 06, 2013 6:04 pm Post subject: |
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According to the Congressional Budget Office that is only a temporary respite
Here are their projections
http://www.cbo.gov/publication/43907
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| If the current laws that govern federal taxes and spending do not change, the budget deficit will shrink this year to $845 billion, or 5.3 percent of gross domestic product (GDP), its smallest size since 2008. In CBO�s baseline projections, deficits continue to shrink over the next few years, falling to 2.4 percent of GDP by 2015. Deficits are projected to increase later in the coming decade, however, because of the pressures of an aging population, rising health care costs, an expansion of federal subsidies for health insurance, and growing interest payments on federal debt. As a result, federal debt held by the public is projected to remain historically high relative to the size of the economy for the next decade. By 2023, if current laws remain in place, debt will equal 77 percent of GDP and be on an upward path, CBO projects (see figure below). |
(bolding mine)
Also
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Nevertheless, if the laws that govern taxes and spending do not change, federal debt held by the public will reach 76 percent of GDP by the end of this fiscal year, the largest percentage since 1950.
With revenues expected to rise more rapidly than spending in the next few years under current law, the deficit is projected to dip as low as 2.4 percent of GDP by 2015. In later years, however, projected deficits rise steadily, reaching almost 4 percent of GDP in 2023. For the 2014�2023 period, deficits in CBO�s baseline projections total $7.0 trillion. With such deficits, federal debt would remain above 73 percent of GDP�far higher than the 39 percent average seen over the past four decades. (As recently as the end of 2007, federal debt equaled just 36 percent of GDP.) |
As the article points out...either the laws will have to radically change (good luck with the most bi-partisan Congress ever) or these are the most likely outcomes.
Since this is the CBO telling us this...I'd put my money on them rather than some article extolling an temporary surge.
Get ready...it's coming. |
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akcrono
Joined: 11 Mar 2010
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| Posted: Tue May 07, 2013 12:03 am Post subject: |
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So many people talk about the debt but don't understand what the effects of that debt are. You can run budget deficits forever and still reduce the debt. Running up the debt during the recession was the responsible thing to do.
Anyway, we're fine. There's no current debt crisis, and the only future debt crisis is based on runaway health care expenses that we don't need to deal with now. |
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