The Incredible Shrinking Deficit

A Calculated Risk post on the budget deficit shrinking to its lowest level since 2008, before the recession and credit crisis.  Here is a Bloomberg article on the same topic. The following are the first three paragraphs from the Bloomberg article:

The U.S. budget deficit will shrink by the end of fiscal 2013 to $642 billion, the smallest shortfall in five years, according to the nonpartisan Congressional Budget Office.

The agency yesterday reduced its estimate of the likely shortfall by more than $200 billion compared with its February projections. The agency cited stronger-than-expected tax receipts as well as payments to the Treasury by government-owned Fannie Mae and Freddie Mac as major reasons for the change.

The decline from last year’s $1.1 trillion deficit would mark the first time since 2008 that the gap between taxes and spending slipped to under $1 trillion. It would also postpone the effective deadline for raising the government’s debt ceiling to avoid default until as late as November, the agency said. 

 This is good news.