Paul Krugman in a recent article points out that while there continues to be a long term deficit problem that we need to solve at some point, the fact is that the deficit problem is not that much of an issue at the moment. To support his claim, he points to analysis done by the Center on Budget and Policy Priorities.
Here's the key chart:
The dark blue line here is the projected deficit in 2011 before Obama and Congress started to take action. The light blue line includes the cuts Obama already agreed to a bunch of cuts in the 2011 Budget Control Act (BCA), and these cuts are already going into effect. Then, we just did the fiscal cliff deal officially called the American Taxpayer Relief Act (ATRA). Add those changes and you get the yellow/orange line. Moreover, the CBPP goes on to estimate that another $1.4 trillion in revenue and/or spending cuts would bring the debt ratio at the end of the decade back down to around its current level.
The underlying message, as Krugman points out, is that while there may be budgetary and debt issues in the long run, the debt is actually pretty manageable for the foreseeable future.
Here's the key chart:
The dark blue line here is the projected deficit in 2011 before Obama and Congress started to take action. The light blue line includes the cuts Obama already agreed to a bunch of cuts in the 2011 Budget Control Act (BCA), and these cuts are already going into effect. Then, we just did the fiscal cliff deal officially called the American Taxpayer Relief Act (ATRA). Add those changes and you get the yellow/orange line. Moreover, the CBPP goes on to estimate that another $1.4 trillion in revenue and/or spending cuts would bring the debt ratio at the end of the decade back down to around its current level.
The underlying message, as Krugman points out, is that while there may be budgetary and debt issues in the long run, the debt is actually pretty manageable for the foreseeable future.
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