As the job market improves and unemployment falls, one of the central attacks from Romney/Ryan against President Obama has to do with the deficit. The attack overlooks Paul Ryan's role in creating the massive deficit, the inconvenient fact that Romney hasn't presented a deficit-reduction plan, and the problem that the Romney/Ryan agenda would appear to make the deficit significantly worse, but that's their story and they're sticking to it.
It's worth noting, then, that as of today, the U.S. federal budget deficit has shrunk -- a lot.
I put together this new chart reflecting the deficit over the course of the last four years. It starts with the figures released in 2009, when the deficit reached a record high of $1.4 trillion. Why is the column in red? Because, thanks to fiscal years, Obama inherited a deficit of nearly $1.3 trillion from Bush/Cheney the moment he took the oath of office.
This year, however, according to the official data published by the Treasury Department, the deficit was $1.089 trillion.
When the president's critics spin this, they'll say, "The deficit was over $1 trillion again," and that will be accurate. What the criticism fails to note, however, is that (a) the deficit is now much smaller than it was when Obama took office; (b) this is the smallest deficit we've seen in four years; (c) this new figure represents an improvement of over $200 billion since last year; and (d) the main drivers of the remaining deficit are Republican policies.
I should note that all of this is predicated on the assumption that deficits are something bad to be avoided, and that a shrinking deficit is necessarily encouraging news. There's a competing school of thought -- which I'm sympathetic to -- that suggests the deficit is currently too small, and that given economic conditions, interest rates, and the current yield of Treasuries, we should be borrowing far more and investing that money in job creation.
But for the purposes of political conversation, such an argument is probably a non-starter; the public has come to believe a deficit that's getting smaller is good news.
If so, Obama has something to brag about -- very few presidents of the last generation can say they managed to shrink the deficit by over $200 billion, even during difficult economic times.
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What I don't understand is why nobody discusses the actual amount of money the republicans have contributed to the national debt. According to my calculations it appears that by the end of 2008, they had contributed a minimum of 8 trillion of the 10.6 trillion we owed. Nearly 80% of it. According to Fact checking sites their policies and legislation still continue to contribute 61% of the debt we have accrued since then. Isn't this worth discussing?
Did you see Friday's AP report on Washington's past 12 years of new debt?
AP posted 12 years of US debt up to Sept 30 2012, which ends our fiscal year. These were taken from the US Treasury's URL, "Debt to the Penny".
Right now Washington is borrowing a little over $100 billion a month on average. That's a lot of cash, but never mind.
AVERAGE MONTHLY "ADDED DEBT"
112th Congress: $103 billion
111th Congress: $147 billion
110th Congress $63 billion
109th Congress $45 billion
108th Congress $48 billion
107th Congress $23 billion
Spin wizardry aside, I think we need find a new name for the $16 trillion owed. It's not "debt". It's never going to be repaid.
However, the number can be cut in half overnight. Just one big debit to the Social Security, Medicare,& federal employee retirement trust funds, and one big credit to redeem government bills bonds and notes and poof, half the debt goes away.
Cough, well, so goes my retirement, but you can't have everything.
Oh my God!!!!! You had to give them the answer to all their questions. Now Romney has the answer to what he can cut to give the 1% all the tax cuts they want, while the elderly, the disabled and the rest of the country can quietly starve, freeze and die. Thanks bunches.
We know how to balance the budget and reduce the deficit. The US had a balanced budget from 1997 thru 2000 and a surplus to strat bringing down the deficit from 1998 thru 2000. Lets go back to that budget.
Rolling Stone just came out with an article, "Who's Driving Mitt?" / If you want to understand Romney's real agenda, just look at what Republicans have been doing in Congress, by Tim Dickinson. The absolute best part, though, is Victor Juhasz' illustration in the hard copy, but I can't find it online yet. It's worth purchasing the mag to see it. Essentially, Ryan is driving like a crazed-looking madman, running down everyone/thing (read: social welfare, civil rights, labor law, etc.) in his path, Lady Liberty is basically hog-tied and muffled in the back seat while Romney is strapped into a toddler car seat on the passenger side,gripping a play steering wheel .
Highlights:
*Refusing to put Obama's jobs bill up for a vote for more than a year though it would have created nearly 2 million jobs without adding to the deficit, paid for through a surtax on millionaires.
*A debt-ceiling standoff wherein job creation was cut in half every month.
* A "retrograde" social agenda, including a Protect Life Act allowing hospitals to refuse an abortion to a dying woman which would save her life, legislation co-sponsored by Ryan denying rape and incest victims an abortion unless the qualification of "forcible rape" was met. Etc.
*The most anti-environmental Congress in history, per Rep> Henry Waxman, ranking Dem. on the House Energy Committee. The House voted to approve the Keystone XL pipeline, allowing toxic tar sands to be transported from Canada across the Midwest's "largest and most vulnerable supply of drinking water." Also voted to allow oil drilling in the Artic National Wildlife Refuge. Also passed a bill "to block all new major regulations until the nation's unemployment rate falls to six percent," including new environmental as well as the financial regulations under Dodd-Frank.
*Approved amendments blocking executive directives on immigration reform, like prioritizing the deportation of violent criminals over those like undocumented spoused of American citizens.
*Voted three times to extend all Bush-era tax cuts, which would "blow a $3.8 trillion hole in the budget over the next decade." The alternative minimum tax and the estate tax would be eliminated, as well as lowering the top tier from 35 to 25% and to 25% for corporations. Well, who makes up this loss? The Child Tax Credit would be slashed, as well as "everything from college aid [by 42%, kicking 1 million students out] to veterans benefits. Don't forget gutting Medicare and Medicaid. And funding for "public schools, food and drug safety, basic science research, law enforcement and low-income housing." And food stamps, "totalling $134 million over the next decade," denying 1.8 million Americans. Oh, and the Pentagon would receive an "extra $29 billion a year."
*With Romney/Ryan, "In the first year alone ... the cost to seniors would more than double, to $12,500 ..."
What does this add up to?
Well,
A "magic asterisk."
... or you can go with Steve Rattner, "The Radical is Romney, not Ryan."
The New York Times
Could you do a similar graph for the Bush Cheney years? It would help me understand it in perspective rather than as a 3-year standalone snapshot. Even better, add in the Clinton years prior to that and lets see the trend! Thanks!
I understand this chart, but there was a wonderful chart on The Rachel Maddow show just now that showed changes to the deficit by President. Wheres this chart? It was great!
I can not believe some of the posts here. All the liberals saying "This is good news" or making outlandish claims on spending that aren't backed by facts. Even this article tries to spin this as good news by saying the deficit is the lowest it's been in four years. Making a claim like that is the same having a burning building, and claim the good news is the flames are at their lowest levels that have been since the fire started, even as the building continues to burn down to the ground.
For all you (and the best term I can use without curse words is idiots) .. the deficit is still over $1 Trillion dollars. The drivers of this deficit are the three elephants in the room -- Social Security, Medicare, and Medicaid, which are all growing faster than inflation and faster than the GDP of the county. With growth rates in costs exceeding 8-9%, the economy and tax base can NEVER grow fast enough to keep up. Social Security is now paying out more than they take in. The total payout of these three exceeds $1.6 Trillion per year. And as these expenses climb, over the next four years this amount will grow to at least $2.2 Trillion. That's $600 Billion in new spending! Even if the economy starts growing by 4% per year (robust), that would only offset $400 Billion of the growth. So the deficit will start growing large just to keep this endless maw of costs open. We are heading for bankruptcy and all the liberals can look at is one little decrease.
Lastly, the writers never answer Why has the deficit dropped $200 Billion? And the answer is TARP ran out of money so they aren't spending $200 Billion a year to infuse the economy. The deficit did not drop due to an improving economy. It dropped as the government programs spending like no tomorrow ran out of money!
Thanks to Rachel for pointing this fact out. Of course the largest issue, as far as the national debt, is lack of tax revenue. Between the tax shelters for the wealthy and the same stingy "job creators" who have had their taxes cut for nearly a decade and to what avail, we're just unable to gain real traction on the deficit. But at least President Obama is using honest accounting compared to his predecessors.
This country's problems stems from boom and bust, especially since the Reagan years. We had false prosperity starting in the 80's. It was during the Reagan years that we were told " Deficits don't matter". We started running up a tab, especially for military spending. We also saw the beginning of lose credit for consumers and the start of high interested/high risk market for credit cards.
By the end of the 80's we had a massive stock market crash and the bust was on after the so called boom...mostly for upper income brackets. Yes, some middle income folks did o.k...but they started getting in debt...borrowing off their homes because they thought their homes would always go up in price. The housing market was in the dumps by the end of the 80's...even Donald Trump went bankrupt. The Savings and Loan scandal created a hole in the Real Estate market that ended up being filled by Fannie and Freddie...and we know how that went.
The 90's did see another boom...a tech boom...which ended up going bust, big time. What is ironic is that Goldman Sachs was behind that tech boom...and the next Real Estate Boom...and they are perhaps trying to start another tech boom (they were behind the Facebook stock buy in). By the start of the new Century, the tech bubble burst hard...and then Sept 11th 2001...which really should have been prevented. Talk about a lapse of security. The only thing that kept us afloat was the housing market. Interest rates were kept too low for too long. Refi-maddness hit and sub-prime was growing...but it WAS NOT radical left wingers pressuring the banks...aka Liberals/CRA...aka brown folks. The Bush administration pushed hard for low income housing and ending down payments. They forced the GSE's, Fannie and Freddie to put over 50% of their efforts into the "undeserved market"...don't you love that term? The only way to do that technically was to sell Mortgage Backed Securities.
By the middle of the first decade of this new century we had a scandal with the GSE's supposedly there were accounting issues...nothing like ENRON, but perhaps as a payback for ENRON, so GSE's became handcuffed and the the PRIVATE SECTOR started dominating the housing market. It was the PRIVATE SECTOR mortgage backed securities, AAA rated toxic waste, that was all the rage and the GSE's indeed did end up purchasing those as well. Also those Liar loans, ALT-A loans, were also huge factor in bringing on the crash. There was no accountability, aka regulation, in the housing sector, or on Wall Street for the most part.
Many saw the crash coming, but the Bush administration thought we would have a "soft landing" if the Real Estate market slowed down. Ummm, that was not exactly correct. The "fundamentals of the economy" were FAR from alright. This crash that happened in 2008 was decades in the making. For those so called, "conservatives" who are whining about how things are so bad because of the "policies" of President Obama...they are kidding themselves. There has never been such blatant legislative opposition to a POTUS that I can ever recall. God forbid the black guy does well...can't have them dominating politics like they do sports?? Got to stop brown folks from participating in democracy too. This new onslaught of voter suppression legislation is making me ill.
So, are there solutions? Until we can educate our population and find a way to create a new economic wave...one that we can sustain, we're in real trouble. I am trying to have hope, but I'm concerned. There really is no progressive movement in this country. The Occupy Wall Street movement got me excited, but what happened to it? It needs to continue. We can't be apathetic. We can't be dependent on Uncle Sam, but we can't starve him either. There needs to be some dang compromise. No matter who is POTUS, we need to come together and work through our differences.
If President Obama does win, those who oppose him can't just say no to everything. We will likely will go over the fiscal cliff. I think that is what we need to let happen, and then GOP will be forced to compromise. They will have to eat their medicine and tell Grover Norquist to eat it as well.
O.K...rant over.
The lies are falling apart, 3 weeks before the election!
So let me get this straight, Maddow blasts Romney's "6 studies" for using a right leaning blog post. Then, almost immediately after she finishes, she uses her own blog as a credible source for the deficit going down. And I don't think I'm stretching the truth when I say this is a left-leaning blog.
I'm a democrat and I'm absolutely voting for Obama, but seriously, hypocrite much?
I think it was someone else that was making that point and Maddow showed it. I think it's good to let people know that they should not accept things that these people are saying. STUDIES?
http://www.politifact.com/truth-o-meter/statements/2012/oct/15/paul-ryan/ryan-says-six-studies-say-math-works-romney-tax-pl/
I know, it's Politifact, but really the folks need to be less eager to believe this stuff that the candidates say and look it up themselves.
Though this may get lost in the sea of comments ... for the first time in a while, you dropped the ball Maddow Blog. Where is the sourcing for this graph? Most every source I pull up shows the budget deficit steadily increasing over the past 12 years, including under Obama. Unless you factor in Bush's 2 wars which weren't written into the budget.
You guys do a good job of including that data on the show. Not so much on this graph.
Yaaay! Obama did it!
...but how did he do it? I see others asking how Romney will allegedly reduce the deficit, but nobody's asking how this reduction was accomplished.
It was largely done by a massive pre-election clamp down on spending. Note that there's little to no difference between 2010 and 2011, but 2012 is a sudden drop. That's not a sign of steady recovery under successful policies; it's a sign of an attempt to sweep a huge pile of dirt under a rug right before an election. Many federal departments are leaving people high and dry out of the blue.
FEMA is now calling on an elderly couple in Oak Hill to pay back a $30K grant they received for a house they lost in a fire, and several emergency-response teams to pay back hundreds of thousands in grants each, due to alleged "mistakes" in doling out the grants in the first place. The Department of Labor has started a sudden and unprecedented series of inquiries and flaming hoops to jump through for those seeking unemployment benefits.
Forgive me if I'm not impressed, but liberals can't talk smack about conservatives for wanting to cut spending and then look the other way when a liberal president does the exact same thing for no other reason than to look good right before an election. At least the conservatives may be able to claim they'd cut for the sake of principle instead of public relations.
No wonder MSNBC pays her big buck to be a pundit but not a financial analyst lol How do you know Michael Phelps is fast? You have to compare him with other swimmer! Compare the deficit under all other presidents and this spinner in chief! This blog reminds me of the communist indoctrination session. Every body is creepily on the same p a g e: http://www.businessinsider.com/federal-government-budget-overview-2011-1?op=1
If the deficit is going down, why is a possible debt ceiling fight pending again? How is the deficit and the debt related? I like this news, but I'm confused about how the two exist together.
Google it!
To think the Bush Tax Cuts should have expired months ago and now there is precious little time to see how the economy will react to the end of the payroll tax cut. DUMB!
Nice cherry picking. If it is not too rabid right for you, NPR shows that these "reduced" deficits are still massive in historical perspective. Had you gone back a year, your graph would have shown that, but who wants people to understand your graph is perspective, eh?
http://www.npr.org/news/graphics/2011/08/gr-deficit-spending-300.gif