Back in 2011, there was widespread elite panic about some kind of imminent fiscal crisis unless the United States reached a "grand bargain" on long-term fiscal policy. Neither the grand bargain nor the fiscal crisis happened. What we did get, instead, was a sharp reduction in federal spending relative to what official Washington expected.
Daniel Clifton tells the story with two charts (note that on this first one the y-axis doesn't start at zero):
What accounts for the decline? It's about 25 percent mandatory savings due to health care costs growing slower than expected, about 30 percent interest payments on the federal debt being slower than expected, and about 45 percent lower discretionary spending due to sequestration and related machinations.
The discretional cuts provided a majority of the spending reduction, but they don't have many implications for the long-term sustainability of the American fiscal course and came at a time when more federal borrowing would have been easily affordable. By contrast, the health savings are a huge deal. If the "pay less, get more" era of health care that we've experienced for the past few years can continue, that has huge implications for the American economy and the federal budget.