With the government seemingly committing hundreds of billions of dollars every day toward its efforts to rescue the economy, it's easy to believe that a hole is being dug from which we can never escape.  Remember Budget Director David Stockman's famous quote in 1983 ("...budget deficits as far as the eye can see") after Congress wouldn't reduce spending to go along with the recently passed Reagan tax cuts?  Apparently the eye could only see to 1997.  That was the first year of a four-year period of  healthy surpluses.  In fact, since World War II, we've had six different periods where a deficit has turned into a surplus.  More interestingly, in 1945 we had the largest ever deficit as a percentage of GDP.  Two short years later, we had the largest surplus.

This demonstrates the amazing resiliency of our economy.  It also brings some discredit to those who say we can't grow our way out deficits.  Trust me, there was no reduction in spending during any of those reversals.  Imagine the possibilities if we could combine spending restraint with pro growth policies.  In our $14 trillion economy, each GDP point is worth $140 billion in revenue.  Much/all of that could be surplus (i.e. debt reduction) if we could just hold spending relatively flat. 

A little discipline goes a long way.