I’m seeing news stories about how the US deficit was reduced by half down to $1.4 Trillion within the last year. How is this possible to move this fast? Does the current government have anything to do with it or is it all external factors?
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If I make 1,000 dollars per week, but my expenditures are 1,500 dollars per week, then we are operating at a deficit of 500 dollars per week. We are “losing” 500 dollars per week. That is the deficit. How much we are under the break-even point.
If we make some changes and now our expenditures equal 1,250 dollars instead of 1,500 dollars, our deficit is now 250 dollars instead of 500 dollars (assuming we are still making the same 1000 dollars in income). We are now only “under” the break even point by 250 dollars. That is half of 500 dollars. We have cut the deficit in half.
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