The Nature of Things

Did you know that the federal deficit has TRIPLED under Barack Obama? APRIL FOOL! If you believed that thing about the tripling deficit, you have probably been getting your information from certain mainstream media sources or from spokesmen (always men) for the Republican Party. The truth is quite the opposite. In fact, since Barack Obama took office in 2009 the federal budget deficit has DECREASED from $1,413,000,000 to $845,000,000, a reduction of some 40%. If you look at the reduction in relation to its percentage of the GDP, the picture becomes even more dramatic. That decrease is almost one-half!  A chart from the website Daily Kos puts it all into perspective. Most reputable economists say that the budget deficit is less of a short-term problem for our economy than the deficit in jobs, that it would make sense to spend money now to create more jobs and boost the economy. But the deficit scolds keep screaming, "Deficit bad! Deficit going to destroy civilization!" They...

On this Labor Day, Americans are feeling very insecure about jobs.  Furthermore, they don't understand why politicians are not as concerned about the unemployment rate as they are.  In poll after poll, they have expressed their feelings loudly and clearly.  They want their leaders to stop obsessing about the deficit and focus their energies on creating more jobs. ( Click on the graph to see a larger image .) This is fairly typical of those polls.  Voters from all across the political spectrum and in every region of the country believe by a margin of more than two-to-one that politicians should be working to create more jobs, rather than talking about the deficit 24-7. And it is not only average voters who think this way.  Knowledgeable economists, some of them with a Nobel Prize on their mantel , have warned for years that we are spending too much time dithering on the deficit.   The problem is jobs, lack thereof .  If we improve the economy and put pe...

Can you remember the year 2000?  The country was at peace.  The economy was booming.  As for the federal budget - it was in the black!  Yes, there was a substantial surplus, and the country could look forward to continuing prosperity and using that surplus to address problems and the needs of the population.  All of that seems long ago and far away now. Do you ever stop to think about how we got from there (big surpluses) to here (massive deficits)?  What accounts for the deficit which everyone in Washington decried during the recent set-to over the debt ceiling but which no one did anything serious (i.e., bringing in more revenue to the government coffers) to correct?  Well, here is the answer to both those questions. As you can readily see on this chart based on estimates from the Congressional Budget Office, the biggest portion of the debt now and in the future is a result of the Bush tax cuts.  Another substantial layer is added by the wars in...

Eugene Robinson is an imminently sensible, clear-thinking fellow.  He writes opinion columns for the Washington Post and sometimes appears on MSNBC as a commentator.  Last year he won a Pulitzer for his opinion columns.  Today, in the Post, his column tackles the seemingly intransigent (if you listen to the politicians) national deficit and with a few keystrokes of his word processor, he puts it all to rights. As Robinson points out, it is evident to anyone who is paying attention that the federal government cannot continue indefinitely spending at a rate of 25 percent of the gross domestic product while taking in revenue that equals less than 15 percent of GDP.   Even a mediocre mathematician can see that this is unsustainable.  It is clear that, with the great needs that exist in our society from failing infrastructure to inadequate health care and education, it is ridiculous for this government to have one of the lowest tax rates among the industriali...

After the co-chairmen of the presidential commission on reducing the deficit came out with their draconian proposal last week, it was difficult to believe that anything sane and sensible would emerge from this ill-begotten group, but, in fact, today it did! Representative Jan Schakowsky (D, IL-09) is a member of the commission and today she released her own proposal to reduce the deficit. Here are her major points: * Ending various corporate tax breaks (132.2 billion in annual savings) * Reducing defense spending (110.7 billion in annual savings) * Taxing Capital Gains and dividends as ordinary income (88.1 billion) * Passing cap and trade (52 billion) * Passing a robust public option (10 billion) * Reducing agricultural subsidies (7.5 billion) In addition, she recommends several other smaller changes that would cut tens of billions from the federal budget deficit. Her plan also focuses on $200 billion in investment spending that would help get people back to work, thereby saving the ...

Do you ever wonder if certain people in government have even a basic understanding of budgeting? That is, the amount of money that comes in minus the amount of money that is paid out equals either surplus or deficit. In the case of government, the money that comes in is otherwise known as taxes so the budgeting formula can be stated very succinctly, thusly: Taxes - Expenditures = Surplus/(Deficit) You would think that anyone who has made it to the halls of Congress as an elected representative of the people would at least understand that very basic concept, but apparently, you would be wrong. Exhibit number one of this fallacy is Sen. Jon Kyl of Arizona. This is what he said on Fox News Sunday yesterday: "You should never raise taxes in order to cut taxes. Surely Congress has the authority, and it would be right to -- if we decide we want to cut taxes to spur the economy, not to have to raise taxes in order to offset those costs. You do need to offset the cost of increased s...