U.S. Economy: Slow and Steady Wins the Race

Last updated on May 13, 2012

The economy has shown steady growth. This April, the U.S. treasury received a surplus of $113 billion, which will contribute to decreasing the deficit for 2012. Though it is said that the surplus is majorly due to many short-term factors, it is good news for the economy nevertheless.

The Obama administration has been struggling to come up with a final plan to boost economic growth. The twin strategy of more taxes and decreased government spending hopes to bring in steady economic growth.

Apart from the expiration of payroll tax cuts that led to an increase in payroll taxes, taxes have mostly increased for the rich. Along with increased taxes, the IRS has taken aggressive steps to bring down tax evasion and improve tax compliance to save billions in lost revenue annually. The Obama administration and lawmakers want to postpone increasing the borrowing limit, if they can help it.

Even after the April surplus, the year’s deficit will still be huge. It is expected to reach $845 billion, which is down from the $1 trillion mark it reached in 2012. The deficit for 2013 is expected to the least since 2008.