FEDERAL DEFICIT

In Linda’s post on the budget deficit in the comments it was claimed that the budget deficit was Obama’s fault and a chart was cited that showed the deficit in someone’s estimate of real dollars.

The standard way of comparing deficits across time and across different countries is to show the deficit — past and projected future — as a share of GDP. There are good reasons for this standard practice, as it is the only valid way to make meaningful comparisons over long periods of time when the dollar values change so much. Using other approache makes it too easy for readers to be mislead.

But here are the latest CBO data and projections. The CBO data is the gold standard for making budget comparisons and any other projections are automatically suspect.

The data shows that the budget deficit peaked just as Obama took office. If CBO actually published seasonally adjusted quarterly data it would show that the deficit was over 10% of
GDP before Obama took office and that Obama has actually reduced the deficit since taking office. Moreover, the CBO projections show that in the out years the federal deficit will actually be smaller — as a share of GDP — than it was in the final years of the Reagan administration.


Yes, the federal deficit is a serious problem. But much of what you hear and see about it is pure republican propaganda that massively exaggerates the scope and scale of the problem.
As with most propaganda it depends on the ignorance and/or gullibility of the reader for it to work.

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