There is no denying that the annual deficit is down and decreasing. Nobody can deny that’s good news, but how good? If you are a Krugman devotee, this is something to cheer about (and give Obama credit for).
On the other hand, this is a little like seeing your credit card minimum payment increase at a slower rate even as you keep spending.
Let’s give the President credit for a smaller deficit, lower unemployment, more people with health insurance and anything else perceived as positive … as long as we review all this in a decade from now.
What you don’t hear the pundits talk about is the impact of rising interest rates in the future (sooner or later) and you don’t hear anyone mention where the money will come from to allow the Treasury to pay the Social Security Trust when the Trust must start redeeming bonds. Think of it as every American going to their bank and cashing in their savings bonds.
The problem with politicians is they are incapable of long-term planning. Their frame of reference is either two or six years and their motivation is the vote, not solving the problem.
For the record, here is what has happened to the federal debt in the last twelve months. I suppose growing only one trillion or so is better than two trillion. Whoopee‼️