Skip to content

Most Don’t Realize the Deficit is Falling Dramatically, So Sequester Not Needed

Most Don’t Realize the Deficit is Falling Dramatically, So Sequester Not Needed

February 27, 2013 (Posted by) Don Pelton Comments 1 comment

Reprinted from Campaign for America’s Future under Creative Commons License

By Dave Johnson

There is no deficit problem. The deficit is down about 50 percent as a share of gross domestic product just since President Bush’s fiscal year 2009 deficit and is falling at the fastest rate since the end of World War II. Yet the Washington debate is about how and where to cut us back into recession. Why?

Congress should just repeal the sequester – we don’t need it. We have 10 years to fix the long-term deficit situation. We should not be stampeded by deficit-scare propaganda and instead take the time to carefully consider the right approach. That way we won’t make the mistakes that Europe is making.

Deficit Falling

Here is a chart of the deficit as a percent of GDP: (Data sources below)

Deficit as percent of GDP

Once again, because it might be hard to register due to the drumbeat of deficit-scare propaganda, this is a fact: the deficit is falling at the fastest rate since the end of World War II. It is down about 50 percent as a percent of GDP just since Bush’s huge $1.4 trillion fiscal 2009 deficit. And the deficit is projected to be stable for a decade.

All of that means that no, we do not have a “deficit emergency,” the deficit is not “out of control” and we have 10 years to decide how best to fix things.

So let’s stop listening to the drumbeat of “deficit shock” propaganda and not be rushed into doing any more stupid, destructive cuts in the things We, the People do to make our lives better.

Medicare Cost Growth Way Down, Too

You probably hear again and again that Medicare is the driver of future deficit trouble.

Here is something you probably didn’t know because of the drumbeat of deficit propaganda: Medicare cost growth is way down. From 2000 through 2009, Medicare spending climbed by an average of 9.7 percent a year. Now those increases are down to 1.9 percent and are still falling.

Take a look at this report from the U.S. Department of Health and Human Services,Growth In Medicare Spending Per Beneficiary Continues To Hit Historic Lows:

The very slow growth in Medicare spending in fiscal year 2012 follows slow growth in 2010 and 2011. In 2010, spending grew at only 1.8 percent per beneficiary, and in 2011 at 3.6 percent. Over the three year period from 2010-2012, Medicare spending per beneficiary grew an average of 1.9 percent annually, or more than 1 percentage point more slowly than the average annual growth of 3.2 percent in per capita GDP.

Public Does Not Know Deficit Is Falling

One reason there is so much pressure for cuts is that the public has overwhelmingly fallen for the deficit-scare propaganda drumbeat. Jed Lewison at Daily Kos explains the problem, in “94 percent of Americans don’t know the budget deficit is getting smaller,”

It’s an indisputable fact: The budget deficit is getting smaller.

… But when Bloomberg News commissioned a survey asking Americans whether they believed the budget deficit was growing or shrinking, just six percent answered the question correctly. Ninety-four percent had no clue. And 62 percent actually thought it was getting bigger.

Jed’s post points us to Steve Benen at the Maddow Blog, who has more details in the post, “A well-kept fiscal secret“:

A 62 percent majority believe the deficit is getting bigger, 28 percent believe the deficit is staying roughly the same, and only 6 percent believe the deficit is shrinking.

Here it is, louder: Only 6 percent believe the deficit is shrinking! But here’s the thing: the deficit is shrinking dramatically. That is not a political opinion; it’s just math.

Here is Steve again, “A conversation-ending chart”:

Now, I think it’s probably safe to say deficit hawks are no longer capable of embarrassment, so the chart’s impact is likely limited. That said, there’s a policy point to keep in mind: “Here’s a pretty important fact that virtually everyone in Washington seems oblivious to: The federal deficit has never fallen as fast as it’s falling now without a coincident recession.”

Got that? Every time the nation has reduced the deficit this much, this quickly, economic growth suffers to the point that the economy actually shrinks.

Role Of Media In Democracy

Isn’t it the media’s job to inform the public, not misinform the public? Isn’t correct, accurate, objective information necessary for the proper functioning of a democracy?

What does it say about our country’s information channels, when only 6 percent of the public knows that the deficit is shrinking? Shouldn’t that be a signal to the media to run headlines for a month informing the public, instead of continuing to scare people that the deficit is going to eat them up?

When only 6 percent of the public knows the facts (the deficit is falling fast, it is just math, not political opinion) about the most serious policy discussion that is occurring, with the most serious consequences for our jobs, standard of living, our future … a 94 percent misinformation rate is so far beyond just media incompetence that it has to be looked at as something else.

Propaganda And Its Policy Consequences

“Blowback” is a term that means propaganda you use against a target comes back and hurts you. Anti-government propaganda has convinced the public that “government takes money out of the economy” and “government is in the way of business.” Other propaganda has convinced people that we have a “deficit emergency.” This propaganda is paid for by billionaires and the corporations that mask them, with a vast apparatus that distributes the misinformation.

The billionaires and giant multinational corporations want to cut their taxes and get government rules out of their way. But now they’re killing the economy that laid their golden egg.

Austerity – budget cuts – hurt the economy. They reduce the pressure to make the wealthy pay their taxes, but they cut economic growth for the rest of us. Europe is engaged in a grand experiment with austerity, and we can see the results. They cut their budgets, their economies decline, less tax revenue comes in the door, and their deficits as a percent of GDP actually go up making the problem worse.

Unfortunately, their leaders think that means they should cut even more. The result has been that their economies decline even more, revenue falls even more, and their deficits as a percent of GDP actually go up, making the problem worse.

Unfortunately, their leaders think that means they should cut even more. The result has been that their economies decline even more, revenue falls even more, and their deficits as a percent of GDP actually go up, making the problem worse.

Unfortunately … you get the picture. Unfortunately they don’t.

No Deficit Emergency – Repeal The Sequester

So we don’t have a “deficit emergency” or a “fiscal crisis” or an “out-of-control” deficit after all.

But we still have the “sequester” budget cuts starting Friday, and the consequences to our economy are really bad.

Congress needs to just repeal the sequester. They do not need a “deal” to cut something else out of the budget.

President Obama does not need to make a deal involving cuts that will just make things worse. That’s just falling into the Republican framing of demanding cuts as a solution to everything, strangling our government’s ability to make our lives better. From last week’s post, “Obama Says Cuts Bad, Proposes Cuts”:

Common sense might suggest that if a thug is holding a kid hostage and demanding money you don’t offer him half the money and say he can shoot half the kid. That is a “balanced” response to hostage-taking. But it is not the correct response.

Just repeal the sequester. And instead of cutting, how about repairing the country’s infrastructure, which means a lot of people get hired! And it means we have a modern, competitive infrastructure making our lives and businesses better.

–

Chart data sources:
GDP Source: http://www.bea.gov/national/index.htm#gdp
2013 forcast using low 2.5%: http://www.bloomberg.com/news/2012-09-13/fed-officials-upgrade-economic-growth-outlook-in-2013-2014.html
Deficit: http://www.whitehouse.gov/omb/budget/Historicals
2013, 2014 deficit estimates: http://www.foxbusiness.com/government/2013/02/05/cbo-sees-fy-2013-budget-deficit-at-845b-smallest-since-08/?

Follow me and CAF on Twitter:


Print Friendly, PDF & Email

Articles, Economics, Politics
Deficit, Destruction of Middle Class

Post navigation

PREVIOUS
If You Believe Agenda 21 is a UN Conspiracy, You May Be at Risk for Drinking Raw Milk
NEXT
“If You Want to Head-Off Fascism, You’ve Got to Find a Politician Willing to Take on the Financial Sector”

Join Our Mailing List

One thought on “Most Don’t Realize the Deficit is Falling Dramatically, So Sequester Not Needed”

  1. RickD says:
    March 1, 2013 at 3:21 am

    Thank you for both an informative and enlightening article that touches upon some very sore spots. Yes, our government is mired in partisan nonsense and I do not mean just the increasingly radical and unresponsive GOP. Democrats must share the blame if only to the extent that they allow unsupportable politics devoid of fact to stand unchallenged. My own opinion is that they as well as their counterparts are in a race for corporate funding and refuse to alienate those donors.

    The second point that needs more thought and airing is the fact of the sad state of our free press. Without that increasingly extinct institution our democracy will surely die.

Leave a Reply Cancel reply

Your email address will not be published.

CLICK IMAGE BELOW TO WRITE ONLINE LETTER OPPOSING THE MINE

DONATE TO THE FOOD BANK OF NEVADA COUNTY

(CLICK IMAGE)

DONATE TO NEVADA COUNTY RELIEF FUND (click image below)

Subscribe to Sierra Voices Journal

Jack Kornfield: A Steady Heart in Time of Corona Virus (Part I)

Erika Lewis, Shaye Cohn, Craig Flory – Got A Mind To Ramble

“Everlasting Arms”

Tara Brach: A Steady Heart in Time of Corona Virus (Part II)

Recent Posts

  • More Evidence That The West Sabotaged Peace In Ukraine
  • Rain and Heat, Fire and Snow
  • Nuclear Fusion Won’t Save the Climate
  • If You Laughed at the Doomsday Clock Update, You Should Find This Hilarious
  • California’s next flood could destroy one of its most diverse cities. Will lawmakers try to save it?

Recent Comments

  • If You Laughed at the Doomsday Clock Update, You Should Find This Hilarious on The Grim Poetry of Science
  • In Praise of Warriors, and Criticism of War on Celebrated to Death: Memorial Day Is Killing Us
  • Why Should I Believe This Guy When He Complains About Diversity and Immigrants and the Fight to Prevent Climate Change? on IN PRAISE OF WARRIORS, NOT WAR
  • Why Isn’t Biden on the Phone with Putin? on Reinforcing Failure in Ukraine
  • car reviews on Obama Says He Never Campaigned for the Public Option

Archives

  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • November 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • July 2018
  • June 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • March 2017
  • February 2017
  • January 2017
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • December 2015
  • June 2015
  • May 2015
  • April 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • January 2014
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • September 2009
  • August 2009

Categories

  • Abortion
  • Afghan Trap
  • Afghanistan
  • Aging
  • American Empire
  • Anti-Depressant
  • Anti-Semitism
  • Arms Sales
  • Articles
  • Atlas Obscura
  • Authoritarianism
  • Black Lives
  • Black Lives Matter
  • Blog
  • Buddhism
  • Budget
  • Buskers
  • California
  • Capitalism
  • Carbon Offsets
  • Cartoon
  • China
  • Climate Change
  • Compassion
  • Constitution
  • Corona Virus
  • Corruption
  • Cosmology
  • Coup
  • COVID-19
  • Dams
  • De-Dollarization
  • Democracy
  • Democrats
  • Depression
  • Disenfranchisement
  • Douglas Macgregor
  • Drought
  • Economics
  • Education
  • Election Fraud
  • Electoral College
  • Empire
  • Environment
  • Extinction
  • Farming
  • Fascism
  • Filibuster
  • Fire!
  • Flood Control
  • Floods
  • Food Insecurity
  • Foreign Policy
  • Forest Ecology
  • Forest Management
  • Fracking
  • Freedom of the Press
  • Gardening
  • Gender
  • Genocide
  • GOP
  • Great Movies
  • Grist
  • Groundwater
  • Halloween
  • Health Care
  • High Country News
  • History
  • Humor
  • Hunger
  • Idaho-Maryland Mine
  • Ignorance
  • Immigration
  • Indigenous Peoples' Day
  • Insects
  • Iran
  • Israel
  • Labor
  • Lobbying
  • Local
  • Lunar Influence
  • Marijuana
  • Masks
  • Medical Care
  • Men
  • Men's Issues
  • Mental Health
  • Middle Class
  • Military Industrial Complex
  • Mining
  • MMT
  • Modern Monetary Theory
  • Moral Obligations
  • Music
  • Native Americans
  • NATO
  • Neocons
  • Neoliberalism
  • New Cold War
  • Nuclear Fusion
  • Nuclear War
  • Nuclear Winter
  • Nutrition
  • Oligarchy
  • Palestine
  • Pandemic
  • Parenting
  • Peace
  • Pharmaceuticals
  • Physics
  • Poetry
  • Police
  • Politics
  • Populism
  • Press
  • Propaganda
  • Race
  • Religion
  • Republican Derangement
  • Reviews
  • Revolution
  • Right-wing terrorism
  • Rights of Nature
  • Rise Gold
  • Rivers
  • Roe v. Wade
  • Romance
  • Russia
  • Russiagate
  • Science
  • Scott Ritter
  • Slavery
  • Sleep
  • Smoke Inhalation
  • Spineless
  • Student Debt
  • Summer
  • Supreme Court
  • Technology
  • The Hartmann Report
  • Trump Virus
  • Tuba Skinny
  • Tyranny
  • Ukraine
  • Uncategorized
  • Unipolar vs. Multipolar
  • Vaccine Refusal
  • Vaccine Safety
  • Voting
  • War
  • War on Government
  • Water
  • Watersheds
  • Wells
  • Wildfires
  • Winter
  • Women's Issues
  • Work
  • Yemen

Meta

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org
© 2023   All Rights Reserved.