Four years after an exploding budget deficit helped fuel a Tea Party electoral sweep, the federal government's tide of red ink has receded — not only as an election issue but also as an economic problem. The government ran a deficit of $486 billion in the fiscal year that ended Sept. 30, the smallest since 2008, according to a report issued by the nonpartisan Congressional Budget Office on Wednesday. Measured against the size of the economy, the deficit -- at 2.8 percent of the gross domestic product -- is now lower than the average deficit over the past 40 years. That figure is down from 9.8 percent of G.D.P. in 2009.
Given that the image showed the deficit in the years leading up to the Obama presidency, and the deficit every year of Obama's presidency -- all confirmed by independent data -- I assumed Fournier simply doesn't know what "cherry picked" means. But in a subsequent reply, the columnist was more specific, arguing that the narrowing budget deficit doesn't really count. The deficit may be shrinking now, the argument went, but the shortfall might get bigger in the future.
It's a curious approach to the debate over fiscal policy, given the latest developments.
All told, the annual budget deficit is nearly $1 trillion smaller now than the one Obama inherited from Bush/Cheney. This remains the fastest deficit reduction seen in the United States since World War II.
The politics of this, however, are quite strange. The public has no idea this is happening, and many of the same political voices who claim to be most concerned about the annual budget shortfall -- for reasons that often make no real, substantive sense -- continue to complain in a way that seems disconnected to actual developments.
The principal gripe seems to be that the short-term "success" on deficit reduction -- if we're to assume a smaller deficit right now is a good thing, an assumption I believe is a mistake -- is irrelevant because long-term deficits pose a more significant problem.
At first blush, that may even seem like a credible concern. But my response to the deficit hawks is simple: exactly when did you arrive at this conclusion?
For most of the Obama presidency, Republicans, deficit hawks, Beltway pundits, and everyone else screaming about the deficit demanded immediate action. We're facing a "debt crisis," they said. Obama's deficits are "turning the United States into Greece," they exclaimed. The economy will never recover unless the White House helps get our fiscal house in order, they insisted.
Well, here we are. Obama shrunk the deficit by a trillion dollars, faster than anyone thought possible (or even responsible). Where are those who cried about America's road to a Greece-like fiscal catastrophe?
They're apparently the ones saying, "Whatever" to the fastest deficit reduction in generations.
Why is that? Paul Krugman has a hunch: "[T]he deficit scolds themselves are unappeasable -- nothing that doesn't involve severely damaging Social Security and/or Medicare will satisfy them. Why, it's almost as if shredding the safety net, not reducing the deficit, was their real goal."
I suspect it still is.
Oct. 9, 201402:18