US Budget Deficit Is Shrinking Faster Than Any Time Since WW ll

The US budget deficit for is projected to be 5.3% of GDP in 2013.  The deficit was 9% of GDP in 2010.  The 3.7% decline in the deficit is the fastest decline that we have experienced since WW ll.  Apparently, Washington is more focused on deficit reduction than it is on unemployment.  The economy is only expected to grow by 1.3% in 2013.  The deficit reduction is being driven by major cuts in government spending and by tax increases.  Fiscal policy, therefore, is responsible for the low growth rate projected for 2013.  This is very much like what happened in 1937 when the recovery from the Great Depression went into reverse because of a fiscal policy that was designed to cut the deficit. 

We did not recover from the Great Depression until government spending on the military buildup for WW ll greatly expanded government spending and US budget deficits.  Economic growth following the war quickly reduced the budget deficits and the burgeoning national debt. 

We have long term problems with government spending, primarily on healthcare, that need to be addressed.  The current focus on short term deficits and the lack of action on our real long term deficit problems is a real cause for concern.