A headline in the Wall Street Journal reads, “U.S. Deficit Shrinks to Level Last Seen in ’07.” The problem with this headline isn’t its accuracy (although it should say ’08 unless it’s speaking as a percentage of GDP). The problem is that readers are likely to come away with the false perception that the federal government, which ran a deficit of $483 billion for the 2014 fiscal year, has its finances, and the deficit, and the debt, under control. Here are a few other potential headlines the Journal could have used that might have painted a more accurate picture: “U.S. Runs 6th-Largest Deficit in History,” “U.S. Runs 12th-Largest Inflation-Adjusted Deficit in History,” “U.S. Borrows Nearly Another Half-Trillion Dollars,” or “U.S. Debt Doubles Since ’07.”
Let’s compare the federal government to a relatively average Joe. Percentage-wise, if the government were a citizen (Joe) whose after-tax earnings were $60,000 a year, this is how much it would have spent each year over the past decade (according to tallies from White House tables and this press release from the Treasury Department):
So, over the decade, Joe would have spent $190,638 (or 32 percent) more than he had available to spend — and so did Uncle Sam. How much would we really be applauding Joe for his frugality because he “only” spent $9,593 (or 16 percent) more this year that he had available, thereby adding to his massive debt at a little slower pace than he did during his earlier spending spree?
Yesterday’s presentation by the U.S. Treasury was a comical spectacle—at least for those of us with sardonic senses of humor. The good news? The deficit for FY2014 (which ended September 30) was 29 percent lower than the deficit was in FY2013.
In his weekly radio address, President Obama explained the budget he'll rollout next week, and said, "the truth is, our deficits are already shrinking."
"My budget will reduce our deficits not with aimless, reckless spending cuts that hurt students and seniors and middle-class families – but through the balanced approach that the American people prefer, and the investments that a growing economy demands," said Obama.
In a statement released at 5 a.m. today, Senator Jeff Sessions, the top Republican on the Senate Budget Committee, blasts the budget the Senate passed very early this morning. Sessions's main concern is that the budget "has zero real deficit reduction" and "never balances."
“The content of the plan the majority has now approved demonstrates why they were unwilling to reveal it for so long: their proposal, once accurately understood, cannot be publicly defended," says Sessions.
President Obama has often talked about the need to reduce the budget deficit. Before his run for the presidency, Senator Obama was rather harsh in his criticism of George Bush's deficits. And in July 2011, during the debt ceiling crisis, the president even addressed Congressional leaders in a talk the White House titled "President Obama on Deficit Reduction: “If Not Now, When?” During the talk, he said:
"The president has always believed that deficit reduction is not a goal unto itself," said Carney. "The whole purpose of deficit reduction should be part of an overall policy objective of strengthening the economy, having it grow faster, have it create more and better jobs for the middle class. And that's the president's objective."
Carney then indicated the president's budget will not be balanced.
This week Paul Ryan’s House Budget Committee is set to release its fiscal year 2014 budget, which promises to balance Uncle Sam’s books in 10 years. Ryan’s offering will elicit lamentations from the usual quarters of the mainstream media: House Republicans have lurched sharply to the right, they have abandoned the pragmatic principles of their forebears, they are now totally unfit to govern.
When it comes to deficit reduction, President Obama and the mainstream press seem to have a fascination with the figure of $4 trillion. During last year’s first presidential debate, Obama falsely claimed, “I've put forward a specific $4 trillion deficit reduction plan,” even though he’d done nothing of the sort.
President Barack Obama used his second inaugural address Monday to offer an aggressive, unapologetic defense of activist government and to call for a new spirit of unity even as he seeks to move the country even further left.