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Thursday, August 17, 2017

“Reagan proved that deficits don’t matter.”

–Vice President Dick Cheney, 2002

Given the great hullabaloo in Washington over government spending, here are a couple of noteworthy facts. Under President Obama, the federal budget deficit has been more than cut in half, from a FY 2009 high of $1.55 trillion (largely inherited from George W. Bush) to an estimated $642 billion this year, according to the Congressional Budget Office.

However, a recent Bloomberg News poll shows that 10 percent of American voters are acquainted with this indisputable fact — 59 percent mistakenly believe that the deficit has risen under Obama. Another 26 percent think it’s remained approximately the same. It’s hard to run a democracy given such widespread public ignorance.

Militant ignorance, much of it. Fully 93 percent of Tea Party members subscribe to the false belief that government spending is skyrocketing out of control. No wonder they’re running around with their hair on fire.

But hold that thought, because there’s more: Measured as a percentage of the overall U.S. economy, the federal budget deficit has shrunk from 10.1 percent in 2009 to 4 percent today. Given increased revenue and decreased spending, the CBO projects the figure will decrease to 2.1 percent by 2015.

“By comparison,” the May 2013 report notes, “the deficit averaged 3.1 percent of GDP over the past 40 years.”

And for this we needed a government shutdown?

And yes, I said decreased government spending. Contrary to the myth of federal profligacy under President Obama, total expenditures for FY 2013 and 2014 (which began last October 1) have actually gone down for two years running, together with government employment.

Overall, since 2009 government spending has risen at an annualized rate of only 1.4 percent, as compared to 8.1 percent during George W. Bush’s second term, 4.9 percent during Ronald Reagan’s, and 5.4 percent under George Bush the elder. Bill Clinton averaged 3.9 percent during his second term.

(Incidentally, the CBO projects that the Affordable Care Act — assuming the Healthcare.gov website eventually gets put in working order — will also contribute to shrinking the deficit, albeit a modest $143 billion over 10 years.)

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