Fiscal Follies

The US budget deficit hit 9.8% of GDP in 2009. It then steadily declined to 2.4% in 2015, thanks to curbs on defense and discretionary spending worked out by Obama and Republicans, ultra-low interest rates, and rising tax revenues due to an improving economy. Last year, the deficit was 3.4% and this year it’s projected to be 4.7% before factoring in the just-proposed 2-year $300 billion bi-partisan congressional spending increase. Yikes!