On January 7, 200--two weeks before Barack Obama took the oath of office--the Congressional Budget Office forecast the federal budget deficit for fiscal year 2009 at $1.2 trillion. Now, the CBO is projecting the deficit will be only $642 billion for FY 2013, $200 billion less than the nonpartisan budget scorekeeper estimated as recently as February.

For policymakers in Washington, the implications couldn't be clearer. For starters, the counterproductive Beltway fixation on immediate debt reduction, which economists have warned is slowing U.S. economic growth and costing millions of jobs, should be jettisoned ASAP. And to be sure, the Republicans' next round of debt ceiling hostage-taking should be condemned as the economic sabotage it is.

The CBO explained why the U.S. fiscal picture is improving so dramatically:

If the current laws that govern federal taxes and spending do not change, the budget deficit will shrink this year to $642 billion, CBO estimates, the smallest shortfall since 2008. Relative to the size of the economy, the deficit this year--at 4.0 percent of gross domestic product (GDP)--will be less than half as large as the shortfall in 2009, which was 10.1 percent of GDP...

CBO's estimate of the deficit for this year is about $200 billion below the estimate that it produced in February 2013, mostly as a result of higher-than-expected revenues and an increase in payments to the Treasury by Fannie Mae and Freddie Mac. For the 2014-2023 period, CBO now projects a cumulative deficit that is $618 billion less than it projected in February. That reduction results mostly from lower projections of spending for Social Security, Medicare, Medicaid, and interest on the public debt.

By 2015, the annual deficit is now projected to just 2.1 percent of U.S. gross domestic product, well below the 40-year historical average of 3.1 percent. The gap is expected to grow to 3.5 percent by 2023, "because of the pressures of an aging population, rising health care costs, an expansion of federal subsidies for health insurance, and growing interest payments on federal debt."

The new CBO numbers are just the latest confirmation of House Speaker John Boehner's admission that "we have no immediate debt crisis." Coming on the heels of an analysis by the Hamilton Project estimating that austerity at the federal, state and local level has cost up to 2.2 million American jobs, the CBO report should help put to lie that more budget cutting is needed in Washington. As the New York Times explained just last week:

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I live about two miles from where the Camarillo Springs Fire began. We live here because we love being within a stone's throw of the beaches and canyons along the California coast while still able to get to Los Angeles and Santa Barbara without too much aggravation. For nineteen years we've called this place home, and in that time we've seen wildfires before, but never one like this one.

As I write this, Point Mugu State Park is going up in a blaze of smoke and ash after our local foothills burned in a blaze of glory yesterday here. Until May 2nd, Wood Canyon was a quiet place to ride mountain bikes or hike on little out-of-the-way trails. It's one of our favorite places to go, and this time of year is usually one of the best times to go there because it's cool and spring wildflowers are in full bloom. Deer, hawks, rabbits and the occasional bobcat can be spotted alongside the bike trails from time to time.

Or at least, they used to be able to. Now they're fleeing an out-of-control conflagration that has chewed through most of their habitat and threatens the rest.

Watching exhausted firefighters cut away brush with shovels and bulldozers on TV causes my blood to boil. Here's a fact: Budget cuts due to sequestration cost us some of the most beautiful resources we have in this area. It cost endangered species their habitats, and from bird to butterfly to bobcat, it has devastated the populations living in the now-charred canyons.

Thanks to Republicans' stupid sequester and our former Republican governor's penchant for slashing the budget far deeper than it ever should have been rather than tax corporations even one extra dime, 18,000 28,000 acres have burned away, with more threatened. Deeper firefighting resources might have saved it. At the very least, having a Supertanker on standby might have bought a bit more time before the flames leapt into the canyon and rolled down the other side to the ocean.

Anyone familiar with wildfires knows there are few weapons to battle them, but one of the most effective is the Supertanker airplane, which is why Schwarzenegger cut their contract short by a year, of course. Governor Brown renewed it, but only beginning in September, which is when fire season used to be before our climate got crazy and screwed up. He should have known better.

It's not just the state cuts. In fact, the federal cuts do more harm than state cuts, because the federal budget pays for wildfire and forestry personnel. Thanks to sequestration, firefighting resources took their share of the hit, too.

This is the product of hard-core right wing libertarian destroy-the-government policies. Don't let anyone tell you this was President Obama's idea. It never was. It was hatched by Mitch McConnell and bearhugged by John Boehner as a way to get past the debt ceiling crisis without actually tanking the economy in real time by defaulting on our debt. McConnell came up with it, Boehner sold it to teabaggers, and Obama signed it because the alternative was worse. I've heard you deniers say otherwise. Be advised you're mistaken.

Their messages speak for themselves. Here's National Review Institute, debunking the "liberal myth" that we need federal funding for firefighters.

Our nation somehow managed to survive over two centuries without any federal police and fire department spending. Perhaps the sequester can help remind local governments of this fact.

I suppose they forgot the days when a routine house fire ravaged entire cities. I suppose they've forgotten even back to last year when Colorado lost firefighters, homes, and thousands of acres of forest to wildfires.

Here's the Heritage Foundation.

Fire grants appear to be ineffective at reducing fire casualties. AFG, FP&S, and SAFER grants failed to reduce firefighter deaths, firefighter injuries, civilian deaths, or civilian injuries. Without receiving fire grants, comparison fire departments and grant-funded fire departments were equally successful at preventing fire casualties.

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Yes, losing your job, your house, your life savings, your health insurance and any semblance of economic security might have something to do with it. Ya think? I've spent more time in the past five years talking friends off the ledge:

Suicide rates among middle-aged Americans have risen sharply in the past decade, prompting concern that a generation of baby boomers who have faced years of economic worry and easy access to prescription painkillers may be particularly vulnerable to self-inflicted harm.

More people now die of suicide than in car accidents, according to the Centers for Disease Control and Prevention, which published the findings in Friday’s issue of its Morbidity and Mortality Weekly Report. In 2010 there were 33,687 deaths from motor vehicle crashes and 38,364 suicides.

Suicide has typically been viewed as a problem of teenagers and the elderly, and the surge in suicide rates among middle-aged Americans is surprising.

Surprising to whom? The well-paid denizens of the Village's New York chapter?

From 1999 to 2010, the suicide rate among Americans ages 35 to 64 rose by nearly 30 percent, to 17.6 deaths per 100,000 people, up from 13.7. Although suicide rates are growing among both middle-aged men and women, far more men take their own lives. The suicide rate for middle-aged men was 27.3 deaths per 100,000, while for women it was 8.1 deaths per 100,000.

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That's Steny Hoyer letting the House have it during the short debate about whether or not the FAA should receive an exemption from the sequester. You go, Steny. I may not agree with you about everything, but I do agree on this.

Just repeal the damn thing already. It's doing more harm than good across the entire country, from Meals on Wheels to unemployment benefits to government contractors holding onto their jobs by their fingernails across the entire nation and for WHAT? To satisfy the phantom austerity leprechaun hiding between the cells in the Reinhart-Rogoff travesty study?

Today's sequester news comes from David Cay Johnston, writing about cuts at the IRS, where employees will now be furloughed since tax season is behind them.

Last week, we pointed to a piece of news that we have yet to read or hear from most major news organizations: The federal budget deficit is going to take a hit, because Congress included the government’s fundraising arm, the Internal Revenue Service, in the sequester.

Put in proper context, meanwhile, that story is a bigger deal than just a sequester tale. Adjusted for inflation and population growth, Congress has cut the IRS budget 17% since 2002, context that no major news organization has reported, as far as I can tell. Such cuts have real impact, as we shall see.

Moreover, news hooks to this are all over the place. Last Thursday, Treasury Secretary Jacob Lew told House members (the Committee On Appropriations Subcommittee On Financial Services And General Government) that the president wants “a $1 billion increase” for the IRS budget, “of which $412 million is to maintain the integrity of tax law enforcement” through “initiatives that provide a high return on investment.” In plain English, that refers to the budget for tax detectives to ferret out cheats.

Before you all cheer about the odds of being audited dropping, rest assured that if they're stretched for resources, the audits they'll drop will be the ones for large corporations and billionaires. They'll keep the ones for the little guys because they don't take much in the way of resources and can be handled without an army of government lawyers and accountants. YOUR audit could still happen tomorrow, but the Kochs' audit? Not gonna happen.

Just to show you how stupid this whole sequestration is, look at what the furlough will cost in terms of revenues:

• IRS revenue officers, otherwise known as tax collectors, earn an average salary of $50,485, while bringing in $2.5 million each per year.
• IRS auditors who examine individual tax returns, earn on average $75,577, and on average annually find more than $1 million of taxes due.
• IRS auditors working on the biggest corporations, who make nearly $150,000, identify on average $19 million in extra taxes per year. That’s $126 for each dollar of pay, an extraordinary return for the cost.

We've seen how easy it is for these Congresscritters to "come together" when they want something, like a fully-funded FAA. So let's make them repeal this whole thing, restore Meals on Wheels, Head Start, unemployment benefits and yes, even the IRS.

You can sign the Campaign for America's Future petition for repeal here.

Back in 2010, Brad Reed wrote about the Irish bank bailout for C&L.

In exchange for a loan of up to €90 billion from the European Union and the International Monetary Fund, Ireland will have to implement further austerity measures that involve raising taxes and cutting services. And whose services are getting cut, you're wondering?

Yeah, I'll bet I don't have to answer that one, do I?

Now interesting information has come to light about who benefited from the bailout of those Irish banks. Since we've established it wasn't the people of Ireland, who could it be? That's right, it's Bill Gates and the Gates Foundation! Corporate education reform and all sorts of "benevolent goodies," brought to you by the guy who didn't take nearly the same hit that everyone else did during that recession.

Independent.ie:

The world's second-richest man, Microsoft founder Bill Gates, was a major Irish bank bondholder ahead of the financial collapse that saw the taxpayer put on the hook for the €64bn bank bailout.

Gates was a bondholder in Anglo Irish Bank, Irish Nationwide Building Society, Bank of Ireland and Allied Irish Bank, according to filings seen by the Sunday Independent. The filings detail investments held by Gates' Bill and Melinda Gates Foundation.

The identities of wealthy bondholders in the Irish banks, bailed out in most cases by Irish citizens, have never been revealed fully. Billionaire Chelsea owner Roman Abramovich emerged as a bondholder in Irish Nationwide after his investment vehicle Millhouse was involved in a UK lawsuit in which it tried to extract full payment for its bonds in the building society as part of a tender offer. Abramovich and his partners lost, but many other bondholders were repaid in full despite backing bust banks. German and French banks were the largest holders of Irish bank bonds.

Pressure from the ECB and US Treasury Secretary Tim Geithner on Ireland not to burn senior bondholders saw those French and German banks repaid when the Irish banks hit the skids. Some junior bondholders were burnt.

Wasn't that nice of Tim Geithner to make sure our billionaires didn't suffer?

The cost to Ireland for that gesture is at least two more years of austerity measures before they're eased in 2016. These measures, forced on them by the European Union and IMF, actually do harm to Ireland's prospects for economic growth, but when has that stopped the billionaires and oligarchs? After all, 14.3 percent unemployment could be worse, right? Poor and young people have suffered the most, as with all countries where billionaires are served ahead of ordinary folks, and immigration from Ireland to other countries with health care and better social programs has nearly doubled. (Report -- PDF)

But hey, there's a silver lining for Ireland. Microsoft Ireland's earnings are on the rise! Isn't that great? Maybe not. We are seeing an unprecedented rise in corporate profits at the same time that the middle class is disappearing. That's not coincidence.

The math goes like this: Bank bailouts = billionaires made whole at the expense of working people. Corporate profit increases = billionaires made richer at the expense of working people.

The next time you hear something about the Gates Foundation's benevolence, remember that math.

Friday's news that U.S. gross domestic product grew by only 2.5 percent came as a disappointment. After all, that performance not only fell short of the consensus expectation of three percent GDP growth, but was aided by a one-time bump for inventory expansion deferred from the last quarter of 2012. And while the strengthening housing market was a bright spot, those gains were offset by the contraction of government spending that on average has slashed half a point off GDP each quarter since early 2010. As it turns out, after years of austerity by state and local governments, Uncle Sam, too, is holding back U.S. economic growth.

As Floyd Norris explained in the New York Times, the U.S. hasn't seen this kind of contraction since the post-Korean War demobilization of the mid-1950's:

The G.D.P. report released Friday states the total government part of G.D.P. - federal, state and local - came to $3.0306 trillion in the first quarter of this year. That is 0.01 percent below the $3.0309 trillion recorded four years earlier.

Those are nominal figures, not adjusted for inflation...On a real basis, the decline was 6.5 percent.

And that kind of drag, Jared Bernstein warned, is offsetting the double-digit expansion the housing sector has enjoyed for three straight quarters:

Housing continues to be a bright spot as residential investment was up almost 13% on an annual basis. Housing has now been a positive contributor to growth for two-years running, adding 0.3% to the 2.5% growth rate for the first quarter.

But the government sector more than offset housing's contribution, shaving 0.8% off of the growth rate, with across the board declines in defense, non-defense, and state and local public spending. Since 2010q1, the public sector has, on average, taken half-a-percent from real GDP growth per quarter.

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Since the austerity crowd won't own up to a mistake, I will: I engaged in a kind of thought experiment last week, after we first learned that austerity economics is partly based on a spreadsheet error. I wondered, What if you were a government leader who sincerely believed those figures, or an economist who made the mistake of a lifetime?

My empathy was misplaced. This discovery hasn't changed government policy one bit -- at least not yet. Economists Carmen Reinhart and Ken Rogoff seem surprisingly unremorseful. And austerity's paid pitchmen are still hawking their wares.

It looks like we're dealing with austerity's "Curveballs."

Curveball, you'll remember, was the anonymous source who falsely claimed that Saddam Hussein had weapons of mass destruction. Bob Drogin's Curveball: Spies, Lies, and the Con Man Who Caused a War told that story in detail. In an interview in The American Prospect, Drogin notes that all of the CIA intelligence used to justify the Iraq War - all of it -- traced back to a single, self-interested party. This fraud was also the source for Judith Miller's highly influential (and entirely false) reporting for the New York Times.

Curveball didn't need to prove his claims because the decision had already been made to go to war. He just needed to sound plausible enough for Miller and all the other self-interested hacks inside and outside of government.

As Drogin says in the interview, the Curveball episode was "a conspiracy of ineptitude driven by tawdry ambitions, spineless leadership, and fear." It wasn't that "they failed to connect the dots," says Drogin. They "made up the dots."

That sounds a lot like austerity economics. It flies in the face of experience and conventional economics to slash government spending during a crippling recession. But the decision had already been made by powerful and wealthy interests. It was helpful when a few individuals stepped forward with conveniently Curveball-like findings that seemed to disprove the lessons of the past.

It was hardly conclusive, but it was "plausible enough."

There's another important parallel between austerity and the justification for invading Iraq. "In a few cases people tried to stop things," Drogin told The American Prospect, but:

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That's right, our old friend Pete Peterson. PRWatch, with all the gory details:

As the Center for Media and Democracy detailed in the online report, "The Peterson Pyramid," the Blackstone billionaire turned philanthropist has spent half a billion dollars to promote this chorus of calamity. Through the Peter G. Peterson Foundation, Peterson has funded practically every think tank and non-profit that works on deficit- and debt-related issues, including his latest astroturf supergroup, "Fix the Debt," which has set a July 4, 2013 deadline for securing an austerity budget.

Reinhart, described glowingly by the New York Times as "the most influential female economist in the world," was a Senior Fellow at the Peterson Institute for International Economics founded, chaired, and funded by Peterson. Reinhart is listed as participating in many Peterson Institute events, such as their 2012 fiscal summit along with Paul Ryan, Alan Simpson, and Tim Geithner, and numerous other Peterson lectures and events available on YouTube. She is married to economist and author Vincent Reinhart, who does similar work for the American Enterprise Institute, also funded by the Peterson Foundation.

Who else funds AEI? Oh, I know! David and Charles Koch! They give millions to AEI each year, as does the DeVos family, and the rest of the billionaire cadre.

Kenneth Rogoff is listed on the Advisory Board of the Peterson Institute. The Peterson Institute bankrolledand published a 2011 Rogoff-Reinhart book-length collaboration, "A Decade of Debt," where the authors apparently used the same flawed data to reach many of the same conclusions and warn ominously of a "debt burden" stretching into 2017 that "will weigh heavily on the public policy agenda of numerous advanced economies and global financial markets for some time to come." (Note that not everyone associated with the Institute touts the Peterson party line.)

While all eyes have been fixed on Boston and West, Texas this week, Simpson and Bowles have been skulking around Congress trying to revive their austerity agenda with revised numbers for a 'deal'. Flushed with the realization that their primary foundation has washed away in a tidal wave of flawed scholarship, they're now resorting to saying it's just 'common sense' dictating the need to reduce spending. No deal, boys. Give it up.

Meanwhile, over on the Obamacare aisle, the Club for Growth has parted ways with Eric Cantor about including funding for pre-existing condition insurance pools in the budget because we just can't afford it, they say. Cantor is pimping it because he thinks it's an 'alternative' that could justify getting a repeal of Obamacare before the effective date in favor of these high-risk pools. Cantor and the Club for Growth can suck their shoes for all I care. Just leave Obamacare alone, boys.

The austerians are beginning to realize they've lost their footing in this debate. Time to step up and keep reinforcing the truth -- austerity harms the economy. It is no help at all to anyone other than possibly billionaires who want to have it all as the serfs grovel for their crumbs.

When is scholarship not scholarship? When it's not carefully reviewed for every aspect, including the integrity of the underlying data used to draw conclusions.

For several years now, we've been hearing conservatives around the world insist austerity is the road back to prosperity -- because the smart guys in the think tanks say so. Now it turns out those smart guys aren't as smart as they thought.

Republicans based their austerity claims on a study known as Reinhart-Rogoff, which drew the conclusion that debt exceeding 90 percent of GDP leads to economic slowdowns. Other researchers sought to challenge the conclusions and were given access to Reinhart-Rogoff's raw data, contained in spreadsheets.

Their conclusions:

In a new paper, "Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff," Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts, Amherst successfully replicate the results. After trying to replicate the Reinhart-Rogoff results and failing, they reached out to Reinhart and Rogoff and they were willing to share their data spreadhseet. This allowed Herndon et al. to see how how Reinhart and Rogoff's data was constructed.

They find that three main issues stand out. First, Reinhart and Rogoff selectively exclude years of high debt and average growth. Second, they use a debatable method to weight the countries. Third, there also appears to be a coding error that excludes high-debt and average-growth countries. All three bias in favor of their result, and without them you don't get their controversial result.

The coding error might be forgivable, but not when combined with the other two factors, and especially not when the combination of the three yields a false result.

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While still a positive, there's no question that last month's jobs report was disappointing. And financial soooper-gen-i-us (/sarcasm) Jim Cramer knows who to blame. None other than Our Lady of the Sherry, Peggy Noonan.

GREGORY: Let’s look at the numbers here; the unemployment right now is 7.6%, only 88,000 jobs created. You look at the context in terms of recent months, we have that chart as well, you’ve got much fewer than we’ve seen. What’s going on?

CRAMER: This is stunning. Stunning. I think a lot of it had to do with fear-mongering. Remember we had Peggy Noonan on? Not that I don’t…she’s the fear monger in chief. The president did make people feel everything is going to shut down in the country because of the sequester. A lot of the CEOS were scared; a lot of the small business people held back, bankers would tell you that. Only Ben Bernanke, Fed Chief, got this right. He seemed to understand that the country’s hiring is really coming back down.

I know it will shock and surprise you that Peggy Noonan's appearance on last week's Meet the Press included absolutely zero comments on jobs and the sequester, proving once again that Jim Cramer cannot think his way out of a paper bag.

Jim Cramer did also call out President Obama's fear-mongering as well, which frankly, proved to be accurate when he warned that the sequester could hurt jobs. Evidential proof is a concept largely foreign to Cramer. It's interesting that Cramer adopts the framing of right wing blogs to implicate Obama.

There is little doubt that the obstruction and gamesmanship in DC surrounding the sequester, the trumped-up deficit "crisis" and absolute demand from within the Beltway for austerity measures has made an impact on hiring and jobs. Who has confidence in these yahoos in DC anymore to work on behalf of Americans? Paul Krugman:

That deficit has declined from 5.6 percent of potential GDP in 2011 to 2.5 percent in 2013 — that’s 3 percent of GDP, which is a lot of austerity. Not all of that cut has even hit yet — the sequester isn’t in the macro numbers yet — but the rise in the payroll tax is very clearly driving the latest bad numbers, which show big declines in retail.

This is really stupid; as long as we’re at the zero lower bound, austerity is a huge mistake. Yet for what, the third time since 2009, all discussion in Washington has turned away from job creation to deficits (even though the debt problem has largely faded away) and the need for an early Fed exit from stimulus (even though unemployment remains high and inflation low).

Clearly, the answer is to cut Social Security!

Would it be too much to ask NBC News to stop propping up someone with little understanding like Jim Cramer and actually be informative for their viewers?