Remember just a while back how the deficit was going to swallow the country whole and lead our children into indentured servitude? Remember the chorus of very serious people intoning that companies would hire more people if only had more certainty about the nation’s fiscal solvency, and that only by coming together for a Grand Bargain raising taxes and cutting government spending would the nation save itself?
The White House hailed a return to “fiscal normalcy” Wednesday, reporting that the federal budget deficit shrank to $483 billion last year, the lowest level as a share of the economy since 2007, before the Great Recession. Driven by higher tax revenues, the shortfall for the fiscal year that ended in September was sharply lower than the $680 billion tallied in fiscal 2013 and about a third the size of the record $1.4 trillion deficit hit in 2009, the year President Obama took office. At roughly 2.8 percent of the overall economy, last year’s deficit also achieves a White House goal for deficit reduction two years earlier than expected.
Interestingly enough, however, now that the deficit is shrinking in large part due to a growing economy–not the other way around–the deficit fetishists seem to have grown silent. Simpson and Bowles are suddenly quiet, and John Boehner is riding other hobbyhorses.
It’s almost as if crying over the deficit weren’t about the deficit at all, but rather a cover for ideological maneuvering.
The deficit and the debt isn’t a complicated problem, especially at a time of radical inequality. Deficits decline and reverse during boom times, and they increase rapidly during recessions. The more unequal and asset-tilted the economy, the more prone it is to larger boom-bust cycles. Deficits will grow steeply during the busts, and shrink and reverse rapidly during the booms.
It’s the job of conservatives during the busts to make sure that progressives don’t get any ideas about helping the 99% left behind in the economic dust, by whining about the supposed cataclysm of government deficits. It’s their job during boom times to discredit government and tell people they should be able to keep more of “their money” in the form of tax cuts, even as they throw more spending at military and tax cuts for corporations.
Conservatives have never really cared about the deficit. They not only prove that by ballooning the deficit whenever they hold the White House, but by the deafening silence whenever Democrats close deficits by focusing on demand-side economic growth.