Friday, January 11, 2013

Reduction Reality, Sort Of


I think we have much further to go in reducing deficits, but one thing is pretty clear: when Rs say President Obama has proposed no spending cuts, they're, as usual, full of it. This article is clarifying.


So where does all this deficit reduction leave us? Since the start of fiscal year 2011, Congress and the president have cut about $1.5 trillion in programmatic spending, raised about $630 billion in new revenue, and generated about $300 billion in interest savings, for a combined total of more than $2.4 trillion in deficit reduction. The result is a substantial cut in how much publicly held debt the country is expected to hold 10 years from now. Instead of reaching nearly 93 percent of GDP, debt is now projected to total about 83 percent of GDP—fully 10 points lower. And while that won’t be enough to finally put the budget onto sustainable footing, it is a massive improvement. In fact, it’s about two-thirds of the way toward stabilizing the debt-to-GDP ratio. 
It’s been a bumpy few fiscal years. But don’t let all the twists and turns obscure the simple fact that we actually have accomplished a significant amount of deficit reduction along the way. Three-quarters of that deficit reduction has been achieved through spending cuts totaling $1.8 trillion, with only one-quarter coming from revenue increases.
I don't doubt there's a certain amount of semantic hanky and panky here: "reductions" vs less of an increase, etc. But the point to be made is that, what you hear from RWS™ and teabaggRs notwithstanding, President Obama and Ds have been willing to address spending way more than Rs have been willing to address revenue. If it's ever going to be solved Rs have further to go than Ds. And defense spending must be on the table.

[Image from linked article]

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