The (not so) scary federal deficit

In non-health care news the Treasury Department announced that the federal deficit fell below the $1 trillion mark, the first since 2009, for the fiscal year that ended September 30th. As Neil Irwin notes this was a 37 percent decrease largely based on more revenue, “up $325 billion from 2012.”

For some perspective, here is a clipped portion of the chart accompanying Irwin’s post covering this time-period (note: the bars descend from a surplus/deficit x-axis of 0.0):

deficit-surplus

Click-through to see the bigger picture, but the point is clear: the deficit is drastically shrinking. 

This prompted the White House to declare “the fastest decline in the deficit over a sustained period since the end of World War II.” Of course it shouldn’t be surprising that that the “fastest decline in the deficit” since WWII followed, well, the fastest increase in the deficit since WII — which is why conservatives are understandably quick to counter in this way. Yet they also seem unable to recognize, that at the same time it somewhat delegitimizes the administration’s deficit-cutting bonafides, it also undercuts their hysterics surrounding ‘out-of-control Washington spending.’

Which is to say, we’ve largely addressed our short-term fiscal sustainability. As Igor Volsky writes legislators have already “agreed to $2.4 trillion in deficit reduction — 72 percent of which has come through spending cuts.” Long-term budget dynamics still exist, of course, but was true before the Great Recession. Outside of future spending on interest and mandatory health care expenditures, the narrative of an erupting federal government is a pernicious myth. We should keep this in mind as reductions to food-security programs begin tomorrow at the same time we’re arguably entering a new food crisis in America, and lawmakers continue to debate further cuts to the most vulnerable.

 

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