Wednesday, February 6, 2013

Out Of Control

One of the many knee-jerk GOP memes is that President Obama has exploded the deficit and is spending our nation down the road to oblivion and it’s getting worse with every passing moment.

Yeah, except it’s not true.

The federal budget deficit in 2013 is projected to be $845 billion, the first time the non-partisan Congressional Budget Office has forecast a deficit below $1 trillion under President Obama.

The reduction in the budget deficit comes after Congress approved higher tax rates on households with annual income above $450,000.

Deficit chart 02-06-13

Steve Benen:

Why is this politically significant? For one thing, congressional Republicans said raising taxes on the wealthy would not improve the nation’s finances, and it appears we now have even more evidence to the contrary. They also seem to enjoy complaining about “trillion-dollar deficits every year,” and will have to drop the line from their repertoire.

What’s more, it appears the deficit will have been cut nearly in half — both in real terms and as a percentage of GDP — since President Obama inherited a massive budget shortfall from the Bush/Cheney administration.

Of course, there’s also the matter of the fiscal debate — as GOP lawmakers continue to insist Washington take the deficit seriously, and adopt austerity measures intended to close the budget shortfall in a hurry, we’re reminded today that the deficit is already shrinking.

There is a school of thought in economics that shrinking the deficit too quickly is actually a bad idea: it leads to inflation and cuts in stimulus spending by the government that can actually harm growth.

Be that as it may, the simple fact is that all the claims about the president’s profligate ways are bullshit and come from the very people that dug us into the hole in the first place.