Fed Chair Ben Bernanke knows why the economy isn’t doing better: Congress screwed it up.

Of course, Bernanke is too polite to phrase things quite so bluntly. But to anyone versed in Fedspeak, that’s the gist of his message. Even as state and local governments are becoming less of a drag on growth, Bernanke says in his prepared testimony before the Joint Economic Committee, “fiscal policy at the federal level has become significantly more restrictive.”

“In particular,” his testimony says, “the expiration of the payroll tax cut, the enactment of tax increases, the effects of the budget caps on discretionary spending, the onset of sequestration, and the declines in defense spending for overseas military operations are expected, collectively, to exert a substantial drag on the economy this year.”

But they have voted 37 times to repeal Obamacare, so you can’t say they haven’t done anything.

The federal budget deficit — what had once been the portent of the Apocalypse and the destroyer of worlds — at least according to the Republicans who created it — has been tamed and caged, according to Ezra Klein and the Congressional Budget Office.

Here’s the short version: Washington’s most powerful budget nerds have cut their prediction for 2013 deficits by more than $200 billion. They’ve cut their projections for our deficits over the next decade by more than $600 billion. Add it all up and our 10-year deficits are looking downright manageable.

Well, then, it’s a good thing these scandals happened to come along.  Otherwise, what would they have to talk about on Morning Joe?

As with everything, though, there is a downside.  As digby notes, the shrinkage of the deficit comes about by cutting services and providing for the ones who need them.

This deficit hysteria has led to massive casualties in the country and around the world — an entire generation has been delayed in even starting to seriously pursue its hopes and dreams, millions have lost their jobs and their homes and have had to start over and the rest of their lives are going to be financially insecure because of it. We have a huge group of long term unemployed who nobody cares about and who are probably never going to be employable again. We have more poverty even as the wealthiest are once again drowning in a sea of money, richer than they were before the financial crisis began. Austerity isn’t to blame for all of it, but there can be no doubt that the constant garment rending over deficits has made it impossible to even talk about doing what’s necessary to fix the real problems we’re facing.

But yay, we cut the deficit.  As Paul Krugman sees it, that’s all that matters to the Very Serious People (VSP).

Yes, there are longer-term issues of health costs and demographics. As always, however, these have no relevance to what we should be doing now — and it’s far from clear why they should even be a priority for discussion. As I’ve written before, the VSP consensus seems to be that to avoid the possibility of future benefit cuts, we must commit ourselves now now now to … future cuts in benefits.

Why, it’s almost as if the real goal was to make sure that benefits get cut even if the fiscal outlook improves.

Meanwhile, our policy discourse has been dominated for years by what turns out to be a false alarm. To the millions of Americans who are out of work and may never get another job thanks to premature fiscal austerity, the VSPs would like to say, “oopsies!”

So now all those people sitting at home out of work can be proud of the contribution they’ve made to getting our fiscal house in order.  Yip effing yah.

The Inspector General’s report on the IRS is out.

Ineffective management at the Internal Revenue Service allowed agents to improperly target tea party groups for extra scrutiny when they applied for tax exempt status, an internal Treasury Department report said Tuesday.

Lax managers allowed the practice to go on for more than 18 months, said the report from the Treasury inspector general for tax administration.

The IRS on Friday apologized for targeting tea party and other conservative groups. The report said that when asked by investigators, IRS supervisors said the criteria they used to decide which groups they examined were not influenced by people or organizations outside the IRS.

The agency started targeting groups with “Tea Party,” ”Patriots” or “9/12 Project” in their applications in March 2010. The criteria later evolved to include groups that promoted the Constitution and the Bill of Rights. The practice ended in May 2012, according to a timeline in the report.

I’m not going to defend the practice of targeting certain groups, but I am familiar with how things work in a large operation, be it a government agency or a company that makes badminton shuttlecocks.  Things run on momentum and management oversight can become lax based on the fact that a lot of different people are very set in their ways.  It’s a lot easier to just let things go on the way they’ve gone on for years without examining exactly what’s going on until some crisis like this happens.

I’m not excusing it, and I hope that whoever was letting things slide at the IRS gets their comeuppance.  But I can certainly understand how it happens, more’s the pity.

The way the Republicans tell it, the economy is still collapsing, the deficit is ballooning, the tax hikes in January are killing business, and Barack Obama is a socialist bent on crushing small business under the heel of the federal government with regulations on top of regulations.  Oh god oh god we’re all gonna die.

Except none of that is true.

The Congressional Budget Office reported Tuesday that the federal budget deficit is declining this year compared to fiscal 2012.

For the first seven months of 2013, the deficit was $489 billion. That is $231 billion less than the budget shortfall for the comparable period last year.

The decrease is almost entirely due to revenue increases.

And we are seeing the strongest rate of job growth in eight years.

Meanwhile, the stock market is booming, the Dow having hit 15,000 earlier this week.

As for the growth of regulations from the federal government, its a canard you always hear from the Republicans — the party of vaginal probes, by the way — but it’s been debunked time and again, even when it was a campaign issue for Mitt Romney.

As I’ve said before, if Barack Obama is a socialist, he really sucks at it.