According to David Wessel of The Wall Street Journal:
The deficit—the difference between government revenue and spending—is shrinking even before the year-end fiscal cliff or a last-minute compromise to avoid it. In the depths of the most recent recession, the fiscal year that ended Sept. 30, 2009, the deficit was 10.1% of gross domestic product, the value of all the goods and services produced. Since then, the deficit has declined to 9% of GDP in 2010, 8.7% in 2011 and 7.0% in fiscal 2012. Private analysts predict the deficit will be between 5.5% and 6.0% of GDP in fiscal 2013, depending on the outcome of the budget talks.
Maybe the deficit isn't such a big deal after all. Maybe Paul Krugman has been right all along: we should be focusing on growth and jobs instead.
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