When an annual deficit loses its ‘t’

This would be a fairly interesting development, especially in an election year.

The Treasury Department forecast Monday that the budget deficit for fiscal 2012 will come in at $996 billion, the first time President Obama has presided over an annual deficit of less than $1 trillion.

The budget deficit in fiscal 2011 and 2010 was $1.3 trillion, while the Obama stimulus law pushed the deficit up to $1.4 trillion in fiscal 2009.

It’s worth emphasizing that this is a projection based on currently available data, and we won’t know the actual 2012 deficit until next fall. It’s not unusual for these preliminary forecasts to be off by significant amounts. (The 2011 deficit, $1.29 trillion, was originally projected to be $1.5 trillion.)

But if the Treasury forecast is right, it will point to a marked improvement in the nation’s fiscal conditions. For that matter, a $300 billion one-year reduction in the deficit is likely to be the best in American history, at least in real-dollar terms.

For the record, I don’t consider deficit reduction an especially important goal under the current circumstances, and would be much happier if policymakers were borrowing right now — at remarkably low interest rates — to make vast public investments and boost the economy.

But the political world has accepted as fact the notion that a smaller deficit is a better deficit. And with this in mind, will Tea Partiers and deficit hawks herald the news as a great accomplishment for President Obama?

Somehow, I doubt it.