For Zervos, the US deficit really starts looking scary around 2015 as the population ages and incomes remain stagnant.
The first issue that could undermine a global economic recovery is the US deficit and debt ceiling debate between Republicans and Democrats.
The sequester was drawn up in mid-2011 as Congress and the White House feuded over raising the debt ceiling and how to slash the huge US deficit.
And of his other domestic initiatives, he will be limited by the burgeoning US deficit, especially in light of his renewed promise to cut it in half by 2009.
The real US deficit problem lies five or more years in the future, when expanding entitlement programs like Social Security and Medicare and flat taxes will create a widening gap between Federal revenues and Federal spending.
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There is a limited relationship between the yuan getting strong and the US trade deficit with China getting smaller.
The US federal deficit as percentage of GDP is around 7% to 8%.
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House Representatives endorsed a tax-cutting package at the end of last year that significantly increased the current US budget deficit.
BBC: Congress delays US government shutdown over budget cuts
Every year there has been a major reduction in economic growth, it is followed by a reduction in the US trade deficit.
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But Republicans are strongly opposed to increased government spending, amid a rancorous political divide over how to tame the US budget deficit.
Those cuts took effect after Democrats and Republicans failed to agree to another plan to cut spending and reduce the US budget deficit.
With little to hold onto so deep into the holiday season, investors remain warmed by potential progress in the US budget deficit talks.
It comes days after President Obama proposed a two-year pay freeze for federal government workers as part of efforts to reduce the US budget deficit.
It will undoubtedly revive (someday), but this chart by Calculated Risk provides a good visual to how deep of a hole the US job deficit really is.
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Polling has indicated most Americans see a mix of tax increases on the wealthy accompanied by some spending cuts as the best way to trim the US budget deficit.
They noted the bill adds to the US budget deficit, while also objecting that the low tax rates - which have the biggest impact on the deficit - are only temporary.
The budget cuts, known in Washington DC as the sequester, were devised in 2011 as an intentionally painful cudgel to encourage Democrats and Republicans in Congress to strike a deal to reduce the US budget deficit.
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That mechanism was created back in 2011 at the time of the US debt ceiling crisis as an outcome so terrible that it would force Republicans and Democrats to find a compromise that starts reducing the US Federal deficit.
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Low growth got us into the deficit problem, and only high growth can get us out.
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In buying such bonds these governments are, in effect, underwriting the large US Federal budget deficit as well.
Is it going to put us in a deficit and make it difficult to pay for our real needs versus wants?
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Economic policymakers typically argue that the US current account deficit, the fact that the nation imports more than it exports, is sustainable because it has a large internal market.
This government we have now actually managed to have a fairly balanced public finance system from 2005 to 2007, and it was only after the subprime crisis in the US that the deficit went awol, but it did EVERYWHERE not just here.
And as I said, I think most economists -- even ones that tend to lean to the right or are more conservative -- would agree that that's not -- that's not the best way for us to approach deficit reduction and debt reduction.
WHITEHOUSE: Presidential Press Conference on the 2012 Budget
There are probably only three ways for the US to reduce its deficit.
"Council was asking us to approve a deficit budget - we are not willing to negotiate in this way, " Mr Schulz said.
Now, if we can't grow our economy, then it is going to be that much harder for us to reduce the deficit.
WHITEHOUSE: President Obama Closes Forum on Jobs and Economic Growth
There is an urgent need for the US to tackle the deficit in the government's finances, according to the International Monetary Fund (IMF).
Obama's economic stimulus package failed to stimulate the US economy and increased the US's economic deficit to heights undreamed of by his predecessors.
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