The US deficit has fallen to the lowest levels seen since 2008. According to the Congressional Budget Office, the US deficit for FY2014 was $486. The figure represents a $195 billion drop from FY2013, and the lowest level of Barack Obama’s presidency.
The US deficit has been a growing problem over the last decade and a half. The deficit exploded under President Bush following a recession and the 9/11 terrorist attacks. The deficit slowly shrank towards the end of Bush’s presidency, before exploding in his last year as the financial crisis set in.
President Obama inherited a trillion dollar deficit upon taking office. The deficit peaked in his year, slowly declining over his first term. The deficit has shrank much quicker in his second term, and has now reached manageable levels.
2014 is the fifth consecutive year that the deficit has fallen. The deficit is now at 2.8% of GDP, which is actually below the 40 year average. The shrinking deficit has been caused by a multitude of factors, including an improving economy, higher tax rates on the top tax bracket, and budget cuts tied to the Budget Control Act.
While the yearly deficit is shrinking, the total US debt continues to rise. The US is currently $17.8 trillion in debt. The country still faces long term debt issues, mostly connected to Medicare and the Department of Defense. The CBO is projecting a few more years of shrinking deficits before they begin to rise again.