Monday, October 13, 2014

The Deficit Is Down and the Deficit Hawks Are Furious

The deficit hawks are perfectly happy to see upward redistribution continue. After all, they and their patrons have been the beneficiaries....

By Dean Baker, Truthout.org:

Last week, the Congressional Budget Office reported that the deficit for the 2014 fiscal year that just ended was $460 billion, considerably lower than they had previously projected. This puts the deficit at 2.7 percent of GDP. At that level, the size of the debt relative to the economy is actually falling.
Not only is the deficit down sharply from its levels of 2009 and 2010, when it was near 10 percent of GDP, it is below the levels that even the deficit hawks had targeted back in those years. In other words, even if we had followed the lead of deficit crusaders like Erskine Bowles and Alan Simpson, the deficit would be no lower today.

If anyone thought this would make the deficit hawks happy, they are badly mistaken. They are furious.
Fred Hiatt, the editorial page editor of the Washington Post, fumed about Obama’s “false victory over the deficit,” and warned that if there are no changes in policy, the debt to GDP ratio will soon begin rising again hitting an “insupportable 106 percent by 2039.” One could find similar expressions of outrage from the various Peter Peterson funded organizations like Fix the Debt or the Committee for a Responsible Federal Budget.
This ranting is utter nonsense. If Fred Hiatt had bothered to do any homework he would have discovered that if the debt held by Social Security is included, the current debt to GDP ratio is already 103 percent of GDP, almost identical to 106 percent number that for unknown reasons he asserts is insupportable....

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6 comments:

Anonymous said...

Mike the deficit was 10,000,000,000
in 2008 today it is 17,000,000,000. It is not better. the source you quote also does not think we should celebrate Columbus day http://www.truth-out.org/opinion/item/26789-the-truth-about-columbus-day-why-are-we-celebrating
Seems like they may be biased.

Anonymous said...

In 2008 there was a major recession/depression and a significant drop in GDP which made the the percentage of the deficit much higher. Since 2008, there has been a significant INCREASE in GDP; so even though the deficit dollars have increased the actual percentage of deficit as it relates to the GDP is WAY DOWN. By-the-way, the deficit has NOTHING to do with supporting or not supporting Columbus Day -- nice try at trying to insert a red herring into the conversation. Are you one of those frustrated Republicans? Did you read the article?

Anonymous said...

If a republican had spent the money you would be upset. The problem is liberals don't have a double standard but no standards.When Reagan cut the tax rates the GDP and government revenues increased ( but not as fast as government spending) liberals and conservatives were concerned about deficits. The amount of money we owe is unbelievable. Truth-out.org is a patchwork quilt of anti-Americanism and Anti- capitalism nonsense if you liberals think capitalism and America are so evil please leave. Find yourselves a nice socialist paradise and go be slaves of some state. Stop trying to ruin America for those of us who want to be free!

Anonymous said...

Anon 10/16, 9:05 AM, I'm not sure what you are ranting about or whether-or-not you know the difference between a liberal, a moderate, a conservative or a progressive, or a socialist.
The deficit was created by spending that both Republicans and Democrats approved. Much of the deficit was created by the Bush/Cheney Iraq War and the only people-corporations that benefited from that war were those involved in the defense industry. By-the-way when Reagan cut taxes government revenues did not increase.

Anonymous said...

Anon 10/16, 9:05 AM, I'm not sure what you are ranting about or whether-or-not you know the difference between a liberal, a moderate, a conservative or a progressive, or a socialist.
The deficit was created by spending that both Republicans and Democrats approved. Much of the deficit was created by the Bush/Cheney Iraq War and the only people-corporations that benefited from that war were those involved in the defense industry. By-the-way when Reagan cut taxes government revenues did not increase.

Anonymous said...

These Republicans are so GD crazy it's unbelievable !!!

Bush and Cheney, the war mongers, should be hung for their ignorance and their lies ! For good measure maybe the current hawks (Mc Cain And Graham) should go to Iraq and Syria to join the troops fighting ISIS or ISIL.....if they so believe it's to be U.S. troops on the ground!!