Deficit to Shrink in 2012, But Not by Much

If you, like me, don’t much understand the economy, the congressional budget, or the skyrocketing, record-breaking deficit, but you like to keep an eye on it every once in a while just to make sure you’re still capable of disappointed head shaking and long-winded sighs, this article is for you.

The good, the bad, and the ugly: in good news, the deficit will shrink this year thanks to new revenues (a nice way of saying taxes) and cuts in government spending. The bad news: the deficit will still be $1.1 trillion according to the CBO, which is down from last year’s $1.3t, but let’s face it. When we’re talking trillions, this seems like chump change. The ugly: we’re still in a ridiculous amount of debt, and 2012 will be the fourth year in a row that the government comes about a trillion shy of paying all of its bills.

More good news: the CBO is assuming that GDP will grow 2%. More bad news: unemployment is expected to jump from 8.5% to 8.9%.

“The federal budget deficit—although starting to shrink—remains very large by historical standards,” according to one report. But that’s not all – how fast this figure shrinks depends on the big question mark of economic recovery. “Probably more critical, though, will be the fiscal policy choices made by lawmakers,” as they once again face the expiration of the Bush tax cuts and $1 trillion in scheduled spending cuts.

So… excited about a shrinking deficit? No matter how moderately the belt is tightened?