MSNBC: US deficit continues to shrink

[Rocky21]

[Maybe the sky is not falling?]

Bolstered by a strengthening economy and job market, the U.S. budget deficit has continued to shrink, reaching its lowest level for the fiscal year to date since 2008.

The deficit declined to $366 billion for the period from October 2013 through June 2014, according to the Treasury Department. That’s 28% percent lower than the deficit for the same nine months last year. The government had a small monthly surplus of $71 billion in June.

The recovery has helped lower the deficit by bolstering tax revenues and reducing the need for social programs, says Gus Faucher, senior economist for the PNC Financial Services Group. “This is more a reflection of the improving economy than anything else.”

http://www.msnbc.com/msnbc/us-deficit-continues-shrink

[Riggo-toni]

Please, next you'll be saying smelling farts prevents cancer.

[JMS]

The unexpected deficit reduction from what I've read has to do with one time payments from Fannie Mae,  which yielded tens of billions  of income we didn't expect... Overall though Obama has done a fair job on the deficit reducing the deficit to GDP ratio by about 2/3 rds from the deficit he inherited.

[TradeTheBeal!]

Just think how well it would be doing without those temporary, post 9/11 Bush tax cuts...

[chipwhich]

Just think how well it would be doing without those temporary, post 9/11 Bush tax cuts...

 

And Obama's payroll tax cuts....

[Springfield]

Don't worry everyone, our next president will be a republican and our deficit will get back to record levels again. All will be right soon enough.

[Larry]

Just think how well it would be doing without those temporary, post 9/11 Bush tax cuts...

 

They were pre 9/11 tax cuts. 

 

Remember?  The reason why we had to have tax cuts, Right Now, was because see, the GOP had this study.  And the study says that the Clinton bubble and corresponding government surplusses were not only going to continue, but now that Republicans are in charge, they're going to explode. 

 

In fact, our study says that the entire federal debt is going to be paid off by 2015. 

 

And, you see, that's why it's bad.  Because there's a chance that the Democrats will be in charge of the government in 2015.  And, if they are, then we all know that they'll spend the money. 

 

And that's why we have to have a huge tax cut, right now.  To save us from the possibility that the Democrats might increase spending, after the national debt has been paid off. 

 

And Obama's payroll tax cuts....

 

Uh, they've already been gotten rid of.  You might have noticed it, on your paycheck?  I suspect that lots of people noticed. 

[Riggo-toni]

Just think how well it would be doing without those temporary, post 9/11 Bush tax cuts...

I'd rather think about how great we'd be doing if it hadn't been for W's unprecedented spending spree.

[twa]

The unexpected deficit reduction from what I've read has to do with one time payments from Fannie Mae,  which yielded tens of billions  of income we didn't expect... Overall though Obama has done a fair job on the deficit reducing the deficit to GDP ratio by about 2/3 rds from the deficit he inherited.

 

deficits are not passed on , debt is.

 

the sequester and the stimulus ,along with stimulus funds being repaid are largely the driver.(thelow interest rate helps as well)

 

if ya wanna have fun ,try and separate the repayments from the bailouts....which are inherited

[Larry]

Actually, JMS, I'd observe that IMO, the deficit really isn't that much smaller because of Obama.

Frankly, the deficit is shrinking because of the same reason it was so huge: the economy tanked, and it's getting better.

MAYBE Obama deserves SOME credit, for halting the crash, early in his administration.

But, since then, he really hasn't done much. (And therefore, IMO, can't take much credit).

IMO, he's TRIED to make things better. But Congress has pretty much bent over and dropped their pants.

----------

Just my opinion. Part of the general trend of Presidents getting too much credit, and too much blame, for the economy.

[TheItalianStallion]

Whether there even was a surplus during the 90s is debatable, but even if I accept the premise that there was one, it was drained by the bursted bubble which resulted in a screeching halt to the strong growth we were experiencing. When Bush assumed office the economy was contracting.

 

The pre-9/11 "tax cuts" were demand-side rebates, i.e. "stimuli." Not coincidentally it didn't accomplish anything. The 2003 tax rate reductions (which were very modest and not as large as I would've liked) DID coincide with a more robust economy. We rapidly recovered from the bad economy Bush inherited (for the record I don't blame Clinton for that - it's just the business cycle) and were nearly back to black in 2007 despite some of the stupid spending bills like medicare D that Bush signed. Then the dems took congress and made Bush's spending record look good, prompting him to finally start vetoing (and threatening to veto) some bills, including SCHIP and Omnibus 2009, which were promptly signed by Obama when he took office. That alone gives Obama more responsibility than most presidents for their first year in office, but when combined with other spending bills like the porkulus boondoggle, the 2009 deficit firmly belongs to Obama, not Bush.

[TheGoodBits]

Wow. That is an interesting... Errr... Version of events.

[twa]

Don't worry everyone, our next president will be a republican and our deficit will get back to record levels again. All will be right soon enough.

 

The deficit is less of a concern than the debt(which continues to grow and interest rates will climb once again)

 

the fact near bailout level spending has become the norm is also something that will need addressing....or ya better hope the economy takes off

[Hersh]

deficits are not passed on , debt is.

 

 

This simply isn't true and I'm not applying this just to Bush and Obama. Deficits can absolutely be created by prior Presidents (and Congress) and the spending or tax cutting policies that they sign into law.

[chipwhich]

 

Uh, they've already been gotten rid of.  You might have noticed it, on your paycheck?  I suspect that lots of people noticed. 

 

Just contributing a useless response to his useless post.  There is a good discussion available in this thread if allowed to occur

[twa]

This simply isn't true and I'm not applying this just to Bush and Obama. Deficits can absolutely be created by prior Presidents (and Congress) and the spending or tax cutting policies that they sign into law.

 

a budget deficit is limited to the budget in question, past years deficits become debt.

 

it's all academic anyway....just numbers , probably not even on paper 

[Larry]

Whether there even was a surplus during the 90s is debatable, but even if I accept the premise that there was one, it was drained by the bursted bubble which resulted in a screeching halt to the strong growth we were experiencing. When Bush assumed office the economy was contracting.

 

The pre-9/11 "tax cuts" were demand-side rebates, i.e. "stimuli." Not coincidentally it didn't accomplish anything. The 2003 tax rate reductions (which were very modest and not as large as I would've liked) DID coincide with a more robust economy. We rapidly recovered from the bad economy Bush inherited (for the record I don't blame Clinton for that - it's just the business cycle) and were nearly back to black in 2007 despite some of the stupid spending bills like medicare D that Bush signed. Then the dems took congress and made Bush's spending record look good, prompting him to finally start vetoing (and threatening to veto) some bills, including SCHIP and Omnibus 2009, which were promptly signed by Obama when he took office. That alone gives Obama more responsibility than most presidents for their first year in office, but when combined with other spending bills like the porkulus boondoggle, the 2009 deficit firmly belongs to Obama, not Bush.

 

Let's see how many right wing myths and spin we can find in this post. 

 

Warning:  It's probably gonna be a long post. 

 

Whether there even was a surplus during the 90s is debatable

 

Well, yeah, whether gravity works is debatable, too. 

 

But it's a short debate. 

 

See, the numbers for how much money the federal government took in, and how much they spent?  They've been known for a while, now. 

 

The new board software will no longer allow me to embed an image whose URL ends in ".php", so I can no longer insert pretty pictures from usgovernmentrevenue.com, any more.  But here's a link to a pretty picture, and the actual data, in a couple of different formats. 

 

(The blue bars, in the graph?  Those are actual, final, numbers.  The red ones are estimates.) 

 

Also note:  That link goes to data and charts which show nominal dollars.  They are not adjusted for inflation, population growth, or anything else.  It's a perfectly valid way to see whether there was a surplus or a deficit.  But IMO, it's really not a good way to try to compare one year versus another one, especially if the two years are several years apart. 

 

IMO, if you want to do any comparison, long term, the numbers really need to be expressed as a percentage of GDP.  Mainly because the numbers seem to be rather consistant, over the years, when compared to GDP. 

 

See how the bars are below the line labeled "0", for the years 98-01?  Those are called "surpluses". 

 

When Bush assumed office the economy was contracting.

 

Now, this statement, I actually suspect that it's true. 

 

But?  If you go to that link I gave you, earlier?  And scroll down to look at the tables of actual data, below the pretty picture?  If you look, one of the items that's in the data (but not in the pretty picture) is the nation's GDP. 

 

And, if you look, you'll notice that GDP went up, every single year, around that time. 

 

(This is the fiscal year, and GDP in Billions, from the same source.) 

Year  GDP, $B
1999   9089.1	
1999   9665.7	
2000  10289.7	
2001  10625.3	
2002  10980.2	

(Those are federal fiscal years, which start on October 1st, of the previous year.  So, when W took office, fiscal year 2001 was a bit less than half over.) 

 

Yeah, looks like the rate of GDP growth went from going up by $600B/year, to going up by $400B/year, but that's a long way from "contracting". 

 

However, having said that?  Yeah, I do seem to recall that there was a labeled, "official" recession, there.  And yeah, the economy certainly felt like it was hurting. 

 

I wouldn't be at all surprised if GDP did go down, for several months in there, and it just doesn't show up in the annual numbers. 

 

So, my opinion is that you're right.  The actual numbers don't seem to support it, though. 

 

(I'd rate your claim of "contracting" as an exaggeration, but there is some validity, there.) 

 

We rapidly recovered from the bad economy Bush inherited (for the record I don't blame Clinton for that - it's just the business cycle) and were nearly back to black in 2007 despite some of the stupid spending bills like medicare D that Bush signed.

Wow, there's a couple in this one. 

 

1)  Yeah, we "rapidly recovered".  The recession ended in like a year.  Long before your attempt to try to claim that the 03 tax cuts caused it.  They happened after the recovery. 

 

2)  "and were nearly back to black in 2007"????? 

 

See that chart, of the deficits, that I provided a link to? 

 

There's four years of surplus on that chart, that you don't want to admit even exist. 

 

But you want to take that blue bar that's labeled "2007", and refer to that one as "nearly back to black"? 

 

For what it's worth, looking at the actual data, rather than trying to squint at the picture, (and just picking the biggest of the four years of surplus), what we actually had was: 

 

2000:  surplus of $236B.  (Referred to as "Whether there even was a surplus . . .  is debatable")

2007:  deficit of $161B.  (Referred to as "nearly back to black") 

 

So, when we have a surplus of $236B, you aren't sure if it really exists.  But a deficit of $161B, well that's almost there? 

 

Then the dems took congress and made Bush's spending record look good, prompting him to finally start vetoing (and threatening to veto) some bills . . . .

 

1)  Uh, the Dems were elected in 06, and took office in January of 07, when only three months of 07 had happened.  (And when the 07 budget hadn't been passed, and probably hadn't even been proposed, considering the way Washington seems to operate.) 

 

2)  "and made Bush's spending record look good"?????

 

Here's a link to a similar site to the previous, that shows numbers for government spending.  I've chosen to present numbers as percentages of GDP, so that comparisons between different years will be more meaningful. 

 

See that bar for 2007, the first budget the new congress actually passed?  Notice that it's actually smaller than the previous year? 

 

(Now, in nominal dollars, spending was about the same as the previous year.  Spending really didn't go down that year, at least not in nominal dollars.  GDP went up, causing the percentage of GDP to get smaller.) 

 

Now, yes, in FY08, spending went up. 

 

But gee, what was happening, in 08?  Was our economy in the opening stages of the biggest collapse the world has seen since the Great Depression? 

 

Why yes, I think it was. 

 

Was Congress passing emergency spending bills, to try to prevent the collapse of the monetary systems of the entire world?  I think it was. 

 

I seem to remember SecTreas, in fact, going to Congress, and saying that he needed permission to spend a Trillion dollars, right now, and to not say who he was giving it too, and he needed it before the banks closed, or the entire world's banking system was going to collapse.  (He didn't get his request passed.) 

 

including SCHIP and Omnibus 2009, which were promptly signed by Obama when he took office. That alone gives Obama more responsibility than most presidents for their first year in office, but when combined with other spending bills like the porkulus boondoggle, the 2009 deficit firmly belongs to Obama, not Bush.

 

 

And here we get just a whole dump truck full, but they're hard to split apart. 

 

But they all kinda follow a theme, here. 

 

Now, when Obama took office. 

 

1)  Fiscal year '09 was a bit short of half over, already. 

2)  Bush had submitted his final budget request to Congress, months ago. 

3)  Congress had spent months "improving" it (as Congress has been known to do.) 

4)  I think that parts of it had already been passed.  (And the remainder was days away from being passed.) 

5)  The economy had already been in free fall, for at least six months, maybe a year, depending on how you measure it. 

 

Now, you seem to be making this assertion that spending skyrocketed when Obama took office. 

 

That's hard to debate, since the source I usually consider reliable only shows data in fiscal years, and when Obama took office, the fiscal year was half over. 

 

Now, here's a link to a site somebody else posted, that claims to have statistics on government spending, revenue, and deficits, month by month.  You'll have to scroll way down the page.  And the formatting is terrible, so I can't even cut and paste it into a spreadsheet to do calculations with it.  I can't even vouch for the site's accuracy.  But I didn't pick it, somebody else posted it, in another thread, and I don't know of a better one. 

 

Since I can't cut and paste the numbers, I'm just going to type them into my calculator.  I'm going to calculate spending, revenue, and deficit, per month, for the months of FY09 before Obama took office, and the months after he took office.  (I'm going to list February as an Obama month, since he was President for more than half of it.) 

 

       Revenue Spending Deficit
Bush     194    292    99
Obama    161    263    93

(I rounded each month's number to the nearest $B, as I entered them, 
and rounded the final numbers to the nearest $B.)

 

Looks to me like, when Obama took office, revenues plunged, but spending plunged more, and the deficit went down. 

 

the 2009 deficit firmly belongs to Obama, not Bush.

 

Damn that Obama for forcing Bush to deficit spend, before Obama took office.  Probably made him do it so Obama could look good. 

 

----------

 

But let's just examine the overarching theme, of this spew, now. 

 

Your major points, as I see it. 

 

1)  There was no surplus before Bush.  They don't exist.

2)  Bush is not responsible for the deficits which occurred, after he took office, because the economy was bad. 

3)  However, Bush's 03 tax cuts deserve the credit for the economy getting better (in 02). 

4)  And, while there was no surplus, before Bush, Bush deserves the credit for almost having one.  (He only missed the surplus that didn't exist by $400B.) 

5)  Bush is responsible for 07, not Congress (even though Congress took office in January of 07). 

6)  However, Congress (not the economic collapse) is responsible for 08. 

7)  Bush managed to restrain Congress until he left office. (Feb. '09)

8)  But then Obama took office, and gave Congress the spending it wanted.  (Even though spending went down.)

9)  Bush is not responsible for the deficit he didn't inherit, the economy caused it. 

10) But Obama is responsible for the deficit which he did inherit, the economy didn't cause it.

 

----------

 

Have I correctly summarized, and dealt with, everything?

 

----------

 

Edit: 

 

twa, how'd you manage to embed that image?  Every time I try, it tells me that that extension is not allowed, or some such.  (Feel free to respond by PM, to not disrupt the thread.) 

[Predicto]

 

 

 

Seriously, that was an epic (and accurate) smackdown.   Dayum.

[Forehead]

Please, next you'll be saying smelling farts prevents cancer.

 

Smelling farts DO prevent cancer.