http://news.bbc.co.uk/2/hi/business/10353247.stm This might be old news to some, but it's the first I've heard of this ambitous plan. Obama, in a letter to G20 leaders that stresses the need to not withdraw stimulus too quickly, has stated that the USA will reduce their budget deficit in half by 2013. Does anyone have a clue how this is possible? I mean, realistically, will the USA be able to cut spending + raise taxes enough to HALVE the budget deficit in just 2.5 years? I have my doubts.
HAHAHAHAHAHAHAHAHAHAHA! Perhaps he actually meant to multiply x 2 instead of divide. Math was never his strong-suit.
According to Reuters, he "also said public finance problems should be addressed "in the medium term" -- a warning that clamping down on budgets should not be done at the expense of economic recovery." I guess "medium term" is always 3-4 years from the current year. For the short-term, it's always spend-stimulate-spend....
When you've doubled the deficit (annual spending above income) it is a lot easier to get it back down to where we are only burning through a more "usual" amount of deficit annually. We need to get the deficit to below zero (reduce the debt) enough to more than cover our interest payments. However, Democrats won't be able to reduce even the deficit from today's levels by 50%. It's not in their nature.
Halving a $1.4 trillion deficit means having a deficit of "only" $700 billion -- 50% higher than it was during the pre-crash Bush years. (And those deficits were bad enough.) So even if this reduction is achieved I will be less than impressed.