Government

The deficit is being reduced❓❓❓❓❓

One issue; two quite different interpretations. Read the first quote and you may believe “the deficit is being reduced.”  They even quote the CBO as the source of this positive news. But wait 😮😮😮

The Deficit Is Being Reduced

The government reduced the deficit for the FY 2017 budget. But it has no intention of eliminating it. The OMB forecasts a deficit of at least $300 billion to $731 billion a year through FY 2026. That’s an improvement from FY 2009. Any deficit reduction necessitates painful and hotly disputed spending cuts or tax hikes. Even so, a smaller deficit is still not a surplus and will add to the debt. For more, see Current Federal Budget Breakdown. 

 Source: thebalance.com March 22, 2017

just eight days later the CBO provides a much more realistic and quite different perspective and a warning. 

This is how misinformation starts; with only some of the facts and with a limited perspective. Note the characterization of “painful” spending cuts. This is unnecessarily negative. In fact, a growing economy and gradual changes will also lower the deficit (as long as new deficit spending is not created).  But as the CBO states, business as usual is not a viable option. 

At 77 percent of gross domestic product (GDP), federal debt held by the public is now at its highest level since shortly after World War II. If current laws generally remained unchanged, the Congressional Budget Office projects, growing budget deficits would boost that debt sharply over the next 30 years; it would reach 150 percent of GDP in 2047. The prospect of such large and growing debt poses substantial risks for the nation and presents policymakers with significant challenges.

Why Are Projected Deficits Rising?

In CBO’s projections, deficits rise over the next three decades—from 2.9 percent of GDP in 2017 to 9.8 percent in 2047—because spending growth is projected to outpace growth in revenues. In particular, spending as a share of GDP increases for Social Security, the major health care programs (primarily Medicare), and interest on the government’s debt. 

 Source: Congressional Budget Office March 30, 2017

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