What’s worse than high federal deficits? Reducing the deficit too quickly.
The CBO projects that if the sequester takes effect on March 1, the federal deficit for fiscal 2013 will be $845 billion, the first time the deficit has been below $1 trillion in five years.
But the other side of that coin is their prediction that unemployment will stay above 7.5% all year and that GDP will grow at a pathetic 1.4%.
Recognizing that there isn’t going to be a big budget deal between now and March 1, President Obama is asking for more limited spending cuts and tax reforms to replace the sequester.