Buried on page A21 of Friday's New York Times was news that our budget deficit for the fiscal year that ended on September 30th was $439 billion - $44 billion less than the prior year, almost $1 trillion less than its peak during the Great Recession, and a mere 2.5% of Gross Domestic Product (GDP).
That you may not be aware of this fact is unsurprising. If the "paper of record" deems this story inconsequential, do not hold your breath that the nightly news, the Sunday chat shows, or anyone else in the media will do anything other than make passing reference to this fact. And that too says something. It was not so long ago that the media was obsessed with the budget deficit, egged on by Republicans who pulled out Talking Points 101 from their playbook about the need to slash Social Security and Medicare or fear becoming a beggar nation like Greece. There was breathless coverage of the tick-tock of "grand bargain" negotiations between the President and John Boehner and one of DC's favorite creations, the blue ribbon commission, was formed to provide a blueprint for long-term deficit reduction.
But a funny thing happened on the way to no one remembering Simpson-Bowles and opting against trimming earned benefits like Social Security or Medicare. The budget deficit is no longer a problem. Indeed, not only is the total amount less than what it was before the Great Recession, but because our economy is larger, it is also even less as a share of our GDP. Indeed, at 2.5% of GDP, our current deficit is less than the modern historical average and a half-percent below what economists think appropriate for sound fiscal policy.
Of course, we have seen this movie before. When Bill Clinton inherited a massive budget deficit after 12 years of runaway deficit spending by Reagan and Bush, he passed a tax increase on the wealthy, reined in government spending, and the economic boom resulted in a flood of tax receipts that left a $236 billion surplus when he left office. Barack Obama and the Democrats passed the American Recovery and Reinvestment Act and the Affordable Care Act, invested in research and development, saw unemployment plummet, and passed a teensy-weensy tax hike on the top 1%. The reductions in health care spending, the increase in tax receipts from an improving economy (and stock market), and marginal cuts to federal spending have all helped drop the deficit by almost 75 percent from its 2009 high.
Why the Beltway media continues to fall for the Republican trope that they are the fiscally prudent party while the Democrats are shameless spendthrifts is beyond me. We now have 35 years and five Presidents of proof that Republican Presidents spend like teenagers with their parents' credit card and leave it to Democratic Presidents to pay the bill.
But the ho-hum, Obama-cut-one-trillion-from-the-deficit shoulder shrug emoji from the Beltway media is really disappointing.
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