Have We Turned The Corner?

Bill McBride over at Calculated Risk argues that the economy will get better, or better enough anyway that President Obama will be able to take serious credit for reducing the deficit:

And another key graph on the US deficit. As we've been discussing, the US deficit as a percent of GDP has been declining, and will probably decline to around 3% in fiscal 2015.

This graph shows the actual (purple) budget deficit each year as a percent of GDP, and an estimate for the next three years based on current policy (Jan Hatzius at Goldman Sachs estimates the deficit will 3% of GDP in 2015).  Note: With 7.8% unemployment, there is a strong argument for less deficit reduction in the short term, but that doesn't seem to be getting any traction.

 

Now there are a lot of if's here.  And the big screaming question is "Why aren't we doing what we can to lower the unemployment rate?"  And of course, the big screaming answer is "Republicans refuse to allow anything to be done."

But President Obama is reducing the deficit.  It's dropping and continuing to drop.