Well, at risk of sounding like a kool aid drinking optomist, if GDP growth is over 3% and spending is flat, then government shrinks, at least as a percent of GDP plus the budget eventually falls into balance. It's slow and incremental but atleast positive.
"the budget eventually falls into balance"
When, in 259 years?
We have a coming faceoff with China in 10-20 years, and they will be in a great position to defeat us since we will have no manufacturing left while they hold most of our debt.
They could simply pull the plug on our imports while ceasing to loan us the money our government needs to exist every day.
We don't have the luxury of waiting for these slow types of economic trends to materialize.
Give yourself more credit than that! :)
If spending is flat and GDP growth is nonzero, the deficit shrinks amazingly quickly. From 1993-2001, government spending rose at 3.5% on an average annual basis. GDP grew faster, meaning spending fell from 21.4% of GDP in 1993 to 18.4% in 2001. Since 2000, we've seen spending rise back to 20%, increasing at a 7.3% annual rate.
If Nominal GDP grows the 5.5% currently projected by CBO for 2006, and tax collections stay at the same % of GDP as they were for FY 2005 (17.5%), then that would mean an increase in revenues of $157 billion. Keep spending flat, and you've closed $157 billion of the projected $503 billion on-budget deficit. That's a reduction of 31%. Not bad. Do that for two years, and you're close to an off-budget surplus again (although you're still borrowing heavily from social security surpluses to be able to make this claim, and you're still at an overall deficit).
Compounding can be our friend, if GDP growth is greater than spending growth and tax collections stay constant as a % of the economy.
The compounding we've seen under the GOP lately has been our enemy, as spending growth has vastly exceeded GDP growth at the same time tax collections have been shrinking....