The U.S. national deficit compared to GDP is shrinking at an historic rate, according to the Office of Management and Budget (OMB). This office says that our deficit ratio is improving at the fastest rate since we demobilized at the end of WWII. Higher numbers on the graph below denote a smaller relative deficit. The last three bars show the reduction in the ratio.
[For more information, see the article on Investors Business Daily: http://news.investors.com/blogs-capital-hill/112012-634082-federal-deficit-falling-fastest-since-world-war-ii.htm]
Looking at the data in another format, the following graph leads to the same conclusion. (source: usgovernmentspending.com)
The U.S. usually increases its deficit during a recession. We then “grow our way out” of deficit as the economy improves, transfer payments (welfare) decrease, and tax collections increase. However, this time the public feels that it is different. The Great Recession created such a large deficit that we are afraid that we cannot grow out of it.