...falling at biggest rate since 1940s
One reason the sequester - big, indiscriminate spending cuts across the federal government - was put in place was to cut the deficit. But with cuts scheduled to begin next week, the increasingly shrill and panicky debate between Republicans and Democrats over what to do ignores a very important point:
The deficit is already plunging.
Here's what the conservative Investors Business Daily says:
"Believe it or not, the federal deficit has fallen faster over the past three years than it has in any such stretch since demobilization from World War II.
In fact, outside of that post-WWII era, the only time the deficit has fallen faster was when the economy relapsed in 1937, turning the Great Depression into a decade-long affair.
If U.S. history offers any guide, we are already testing the speed limits of a fiscal consolidation that doesn’t risk backfiring. That’s why the best way to address the fiscal cliff likely is to postpone it."
Indeed, the nonpartisan Congressional Budget Office - often cited by both Republicans and Democrats, says:
“From fiscal 2009 to fiscal 2012, the deficit shrank 3.1 percentage points, from 10.1% to 7.0% of GDP.” See the chart above from the Office of Management and Budget.