Editore"s Note
Tilting at Windmills

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October 8, 2010

DEFICIT HAWKS SHOULD BE THRILLED.... The Washington Post ran an item that was easy to overlook today, back on page A12, on the budget deficit. Given all the talk from Republicans and far-right activists lately about the deficit, it's tempting to think it would garner a little more attention.

According to a new estimate from the Congressional Budget Office, the federal budget deficit for the fiscal year was $1.29 trillion, which is, you know, a lot. But the deficit shrank from the year before; it's slightly lower than the deficit President Obama inherited from his predecessor; and the total was also "lower than either the CBO or the White House had predicted earlier this year, suggesting that the wave of red ink propelled by the recession that began in 2007 has finally peaked."

Stan Collender notes the larger context.

In previous years we would have been breaking out the champagne on this news: The monthly budget review released yesterday by the Congressional Budget Office estimated that the federal budget deficit fell by $125 billion from 2009 to 2010. This by far is the biggest one-year nominal drop in the deficit that has ever occurred.

Even if the CBO estimate turns out to be accurate -- the official tally will come from the Treasury later this month -- I don't imagine we'll see a lot of headlines blaring, "U.S. achieves biggest one-year deficit reduction in American history."

Why not? Because it's the kind of news that doesn't really satisfy anyone. For those of us who want to see the government borrow more in order to invest in economic growth and job creation, news of the deficit going down isn't good news at all. Borrowing more money is exceedingly cheap right now, and the economy desperately needs a boost. The fact that the deficit is shrinking may seem like good news in the abstract, but it's arguably the opposite of what we need.

And for those who consider the deficit a civilization-threatening scourge, we may be witnessing "the biggest one-year nominal drop in the deficit that has ever occurred," but it's not enough because it's still $1.29 trillion.

Or as Collender put it, "In other words, the $125 billion reduction in the deficit was both too much and not enough."

Jonathan Cohn added that there were plenty of center-right Dems who balked at deficit spending, even to improve the economy, because they were afraid of a backlash: "Running higher deficits, they thought, would incur the wrath of voters and make re-election difficult. Well, now they've gotten their way. The deficit is coming down. Let's see how much the voters care come November."

Steve Benen 1:25 PM Permalink | Trackbacks | Comments (10)

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And conservatives will complain we are taxing too much in 3, 2, 1...

Posted by: Lance on October 8, 2010 at 1:40 PM | PERMALINK

And thus the Obama years in a nutshell-- the administration starts to accomplish something a lot of people say they want done and as a result they anger some people, it gets ignored by others, and given credit by no one. Next up-- everybody continues to scream for exactly what happened as if what happened never did happen.

Posted by: JonS on October 8, 2010 at 1:45 PM | PERMALINK

I think you buried the lede Steve.

"Meanwhile, federal spending fell slightly compared with 2009, mainly due to signficantly lower costs for the Troubled Assets Relief Program, otherwise known as the bank bailout, which ended Sunday. Payments to mortgage-insurance giants Fannie Mae and Freddie Mac also fell, as did FDIC payouts to cover deposits in troubled banks.

Excluding those programs, spending rose by about 9 percent in 2010 - "somewhat faster than in recent years," the CBO said. The increase was driven primarily by the rising cost of unemployment benefits and other programs related to last year's $814 billion economic stimulus package."

Posted by: Lance on October 8, 2010 at 1:46 PM | PERMALINK

Why not? Because it's the kind of news that doesn't really satisfy anyone.

No. It's because it doesn't jive with the media's narrative of "angry people"... "all over the country"... "unhappy about huge deficits"..."throwing out incumbent politicians".

Posted by: BluePotSmokesBetter on October 8, 2010 at 1:52 PM | PERMALINK

To most of the people complaining, deficit = any domestic spending, which by definition goes to illegal gay Muslims. Democrats would get no credit from those people even if CBO reports the deficit had fallen to zero.

Posted by: PeakVT on October 8, 2010 at 1:53 PM | PERMALINK

I think it's really worth stressing that literally no one actually cares about the deficit. Complaints that our deficit spending is too high are lies, a way to promote a radical anti-government ideology while making it look like you're doing something other than what you are, or while pretending to be "centrist". People only complain about deficits as a way of attacking things they don't like, they're always perfectly happy to allow deficit spending for things they support (like, in the case of our fake "centrists", tax cuts).

Posted by: mcc on October 8, 2010 at 1:56 PM | PERMALINK

Inflation and interest rates are down too.

Posted by: david1234 on October 8, 2010 at 2:18 PM | PERMALINK

What BluePotSmokesBetter said, with the addition that it's also the GOP's narrative.

Posted by: josef on October 8, 2010 at 3:17 PM | PERMALINK

The biggest reason the teabaKKKers will not embrace this as good news is because it was done on the black guys watch. And they will NEVER give President Obama credit for anything, no matter how much it helps them or their cause.

Posted by: Les Ismore on October 8, 2010 at 3:58 PM | PERMALINK

Budget Defict Down!!! 125 billiono !!!
That should be headline news.
Instead it gets mentioned on page A 12.

Something is very wrong in the so called main stream media.

Hey want to see more good things accomplished during the Obama Adminstration


That's quite a list but where's the media coverage

Posted by: MrUniteUs on October 14, 2010 at 2:46 AM | PERMALINK



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