Why don't Americans realize the deficit is falling?

great job channeling Yssup Rider.

Tiny - +1


To someOne so concerned about RH 'bumping his own thread with contributions within the Rules' - post something cogent and constructive for a change.

Tiny - +1


To someOne so concerned about RH 'bumping his own thread with contributions within the Rules' - post something cogent and constructive for a change. Originally Posted by oeb11

Says the King of

+1

Since Barack Obama was inaugurated in 2009, the federal deficit has fallen dramatically. It has dropped as a percentage of the economy:

(The White House, via The National Memo)

And it has also fallen in absolute terms.

In fact, the deficit reduction has been so steep that some economists believe that it has been excessive.

But according to polling, most people are entirely unaware of this trend. Recent polling by Pew suggests just 29 percent of Americans believe the deficit was reduced in the last year, including just 12 percent of Republicans.

To put this in context, fewer Republicans believe that the deficit is shrinking than believe in evolution (43 percent) or man-made climate change (24 percent).

And it's not just Republicans who are unaware that the deficit is falling. Just 50 percent of Democrats and 23 percent of Independents believe the deficit is coming down.

So, what's going on here?

I would guess that it’s a combination of two things. First of all, economists, politicians, and pundits are failing to communicate the facts to the public, or deliberately misleading voters. It is easy for reality to get lost in spin and manufactured narratives.

Second — and more importantly — large numbers of people may be confusing the deficit with the national debt. This is actually pretty easy to do.

The deficit (or, if the number is positive, the surplus) is the amount of change in the national debt in one year caused by the difference between spending and tax receipts. The national debt itself is the total stock of debt owed by the federal government. Even though the deficit has decreased dramatically, the national debt itself is still increasing in absolute terms, and has only just begun to fall as a percentage of the economy.

This confusion needs clearing up. While a deficit can be seen as a barometer of administration policy, the debt reflects longer-term trends in government spending and policy. George W. Bush, for example, exploded the deficit by cutting an array of taxes, and taking the nation to war in Afghanistan and Iraq. However, longer-term factors such as health care costs also contributed — the same factors that are enlarging the debt under President Obama.

While Obama has succeeded in winding down the U.S. military's two biggest foreign entanglements and rolling back tax cuts for the wealthiest Americans — thus lowering the deficit — it remains to be seen whether the Affordable Care Act will fulfill its goal of reducing health care costs.

Furthermore, the main economic drawback of a growing debt — interest payments eating up a greater share of tax revenue — is not a great concern right now, as interest rates remain so low and borrowing remains cheap. Indeed, many economists like Paul Krugman and Ben Bernanke say the U.S. should be growing deficits right now, to provide further stimulus to the economy and to put idle resources to work to bring down unemployment.

In any case, the facts on the deficit contradict the widely held notion that the Obama administration is crazily out of control when it comes to the nation's finances. In order to have a rational discussion about the economy, government programs, and the level of government spending, voters need to have a better idea of what the deficit actually is.

http://theweek.com/article/index/254...cit-is-falling Originally Posted by Guest040616

It’s bad enough that we have a criminal in the WH as in you know who. Now we’ve got bozos like you that have zero clue about what’s really going on. FYI Trump has ADDED a further trillion $$$ to the national debt, where the hell do you think the money comes from with His massive tax cuts for the wealthy? Smoke and mirrors?
Stop driveling your ignorant BS and go you research and I don’t mean watching Faux Fox News, BretFart and all the other Reich wing propaganda. The Repugnants couldn’t care less about the deficits as the Dick Cheney once boated. Just study the GOA and all will be revealed. Let that sink into that plum sized brain of yours. What you are peddling is laughable and the epitome of ignorance.

The estimates to which you allude may very well be accurate.

The obvious problem is that we've dug ourselves a deep hole, and getting out of it ain't going to be easy. A total lack of any degree of seriousness regarding entitlement reform, health care reform, financial sector reform, tax reform, or much of anything else only exacerbates the problem.

Federal government spending in nominal dollars has doubled since the late '90s. Even after adjusting for inflation, it has increased by about 50%.

And we simply don't have a fiscally conservative major party, as anyone who recalls the disingenuousness of the Romney/Ryan campaign obviously realizes. Although the policy agenda shoved through during the 2009-2010 period was manifestly a failure, just look at what George W. Bush and a Republican congress did during the prior years when they had a chance to govern responsibly. It wasn't a pretty picture.

That's why so many people seem to have decided that as ugly as it may be, divided government is less bad than handing all of the power levers to either of our corrupt and dysfunctional major parties.



You'd better forget about reducing spending to the extent that we'll start paying down the debt. The probability of that occurring is about the same as that of your winning a Powerball mega-jackpot. The best that can be hoped for is that we'll eventually limit deficit spending to a level that doesn't exceed the long-term growth rate of NGDP, and thus stabilize the debt/GDP ratio at some semi-acceptable level that doesn't gradually crush the economy.

Yes, the federal government does own a lot of assets. They add up to quite a few trillions of dollars if you include all the land and the oil and gas resources. Don't look for any of that to be sold off in substantial parts any time soon, though.

As all of this plays out, expect the political process to be chaotic and ugly. Originally Posted by CaptainMidnight

Well 6 years later this sure has proven out...

Who is JD Barleycorn? Is he relateds to the real Barleycorn? I can see now why’s the poor bugger no longer posts. LOLLING the fake Barleycorn.

Well 6 years later this sure has proven out... Originally Posted by WTF

Excellent post by Captain Midnight, and something many of us agree with. Thanks for digging it out

Agreed - good post by Captain Midnight.