..........Congratulations, America! Your deficit fell 37 percent in 2013
The federal government’s 2013 fiscal year ended Sept. 30, though most of us were so busy focusing on the government shutdown that accompanied the new fiscal year that there wasn’t much time to reflect on the year that had passed.
Now the Treasury and Office of Management and Budget is out with the final budget results. Surprise! The deficit fell quite a bit in 2013. The federal government took in $680 billion less revenue than it spent, or about 4.1 percent of gross domestic product. In 2012, those numbers were $1.087 trillion and 6.8 percent of GDP. That means the deficit fell a whopping 37 percent in one year.
This is the first sub-$1 trillion and sub-5 percent of GDP deficit since the 2008 fiscal year, which ended the very month that Lehman Brothers fell and a deep crisis set in.
Given this environment and the leadership transition as Ben Bernanke's term ends in January,
the Fed will likely continue its current stimulus program at full blast
-- buying $85 billion in bonds each month
-- until at least March 2014.
That means QE3 could total around
calculates Paul Ashworth of Capital Economics.
That's more than either of its two predecessors.
QE1 totaled $1.5 trillion and the second round of stimulus added up to about
The deficit fell quite a bit in 2013.