Everybody Listen Up! The Deficit Is Actually Shrinking, Despite Beltway Propaganda
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There is no deficit problem. The deficit is down 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.
Here is a chart of the deficit as a percent of GDP: (Data sources below)
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 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.