It went largely overlooked yesterday, but the U.S. federal government ran a surplus in January of about $3 billion. These are rare but not unheard of, even in an era of large deficits, but it’s the context that’s notable – as Republicans and pundits tell the public the government is spending far more than it takes in, we just wrapped up a month in which the government took it more than it spent.
Of course, that’s only one month, though as Jed Graham noted yesterday, the fact of the matter is the federal budget deficit is currently shrinking at the fastest pace in modern American history. In fact, Graham described this as “the deficit chart that should embarrass deficit hawks.”
Now, I think it’s probably safe to say deficit hawks are no longer capable of embarrassment, so the chart’s impact is likely limited. That said, there’s a policy point to keep in mind: “Here’s a pretty important fact that virtually everyone in Washington seems oblivious to: The federal deficit has never fallen as fast as it’s falling now without a coincident recession.”
Got that? Every time the nation has reduced the deficit this much, this quickly, economic growth suffers to the point that the economy actually shrinks.
Republican policymakers, who never met an economic truth they didn’t forcefully reject, not only fail to feel any sense of embarrassment, they’re also convinced that this reality isn’t, well, reality. The GOP line is that the deficit is growing even though it’s shrinking; that the nation’s finances are deteriorating even through they’re improving; and that the fastest deficit reduction in six decades that threatens the health of the economy should be even faster, regardless of the consequences.
It’s quite unnerving, actually, to appreciate how unconcerned Republicans seem about the conditions they pretend don’t exist.