If the current laws that govern federal taxes and spending do not change, the budget deficit will shrink this year to $642 billion, CBO estimates, the smallest shortfall since 2008. Relative to the size of the economy, the deficit this year -- at 4.0 percent of gross domestic product (GDP) -- will be less than half as large as the shortfall in 2009, which was 10.1 percent of GDP.
Thanks in large part to higher taxes on the wealthy, which Republicans said would not reduce the deficit, deficit reduction is picking up speed at a pace few could have predicted. We're now looking at over $400 billion in deficit reduction in just one year, and about $800 billion in deficit reduction since President Obama took office.
Let's say this plainly: for those who saw the federal budget deficit as a "problem," it's fair to say this problem has been largely fixed.
And while we're at it, let's also not forget that Republican talking points on fiscal policy have effectively been left in tatters, and every conservative political figure who's declared "Socialist Obama is turning America into Greece!" looks incredibly foolish right now.
The president took some heat for failing to cut the deficit in half in his first term, and the criticisms had merit, at least insofar as he didn't reach his original goal. That said, Obama's on track to cut it by well over half -- both in real terms and as a percentage of GDP -- in five years.
It's time to stop worrying about a shrinking deficit and start worrying about creating a more robust economic recovery.
Update: Just to clarify a point, I'm not a deficit hawk, and don't necessarily see this as good news. If it were up to me, we'd be borrowing lots of money right now, taking advantage of low interest rates to create millions of jobs, and leaving deficit reduction for another day. My point, rather, is to shine a light on what Republicans said they wanted, and the fact that the right's fiscal criticisms of the Obama White House are the exact opposite of reality.