Good tidings of economic joy

Scott Grannis of Calafia Beach Pundit brings good economic tidings: "In the 12 months ended Nov. '13, the federal budget deficit was $615 billion. The last time we saw a deficit that low was 5 years ago. It has dropped $862 billion from its all-time high of $1.48 trillion in Feb. '10. As a % of GDP, the budget deficit this year will be a mere 3.6%, down radically from the its 2010 high of 10.2%. Most of the credit (about 60%) goes to spending restraint: this year federal spending will be about $3.43 trillion, which is the same as was spent in the 12 months ended June 2009. That will mark four and a half years of zero increase in federal spending. As a % of GDP, federal spending this year will be 20.4% of GDP, down from its 2009 high of 24.4%. The other 40% of the reduction in the deficit comes from increased tax revenues, which in turn came mostly from an increase in the tax base (i.e., more people working, higher incomes, increased capital gains realizations, and higher corporate profits). As a % of GDP, tax revenues this year will be about 16.9% of GDP, up almost 20% from the low of 14.2% in 2009. We didn't need higher tax rates to boost revenues, we just needed a growing economy."    [BJS]