The deficit is shrinking — but it's still a huge problem

We are spending way, way too much money

(Image credit: (iStock))

Let's start with some good news: That monster deficit we faced back in 2009 — all $1.4 trillion of it — has been slashed big time over the past several years. The annual budget shortfall is still $483 billion, but stacked up against the $18 trillion U.S. economy, this deficit is in line with the average-sized deficit going back 50 years.

As usual, when the news is good, both Republicans and Democrats bicker over who gets credit for it. Democrats, led by President Obama, say the deficit is down because they've spurred the economy to grow again, generating tax revenue. Republicans counter that the deficit is down because they've held the line on spending. There's probably some truth in both of these positions.

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