Deficit Thinking

DEFICIT THINKING….Daniel Gross at Slate makes an interesting point about budget deficits:

For Fiscal 2004?which began in October 2003?if you factor out the $164 billion Social Security surplus, the on-budget deficit will be at least $639 billion, rather close to the modern peak of 6 percent of GDP.

What’s interesting is not this actual fact, which is common knowledge, but the fact that there were no Social Security surpluses before 1983 (and only small ones for a decade after that). This means that if you do an apples-to-apples comparison of Bush’s deficits to Reagan’s, the Bush deficits really are pretty close to historical highs.

As interesting as this is, the more important point is that the modern triumph of the tax cut jihadists means that rational discussion of deficits is practically impossible these days. Even Ronald Reagan ? unlike Dick Cheney ? understood that deficits do matter and that supply side economics didn’t work, which is why he raised taxes substantially when it became clear that economic growth wasn’t enough to get the budget under control.

His heirs, however, simply cover their eyes, chant “latte sipping left wing freak show” over and over, and refuse to face reality. By and by we’re all going to be paying the price for their revolutionary zeal.