President Obama’s proposed budget will do some serious deficit a$$-kicking, according to the chart prepared by the CBO, as seen below.
Kevin Drum explains:
The light blue line is their "baseline projection" which assumes that all current laws stay in effect forever and the Bush tax cuts all expire at the end of the year. It shows the federal deficit nearly disappearing by 2017. The dashed line is their "alternative scenario," which assumes extensions of the Bush tax cuts and a few other things as well. It shows the federal deficit improving a bit, but then deteriorating to 6% of GDP by 2022.
The dark blue line is the Obama budget, and it's somewhere in between. But here's an important point that you can't see just from looking at the chart: Obama's budget reaches primary balance in 2018. This means that federal spending is in balance, and the only source of the deficit going forward is interest payments on the national debt. At that point, the debt-to-GDP ratio is stable. That's a big milestone.
Via Bob Cesca