Our Only Deficit Problem Is That It's Too Small

Every time President Obama mentions cutting the deficit in tonight's SOTU, just eat rat poison. Because it means we're fucked.

Brian Buetler at TPM:

Here’s the buried lede from the Congressional Budget Office, which on Tuesday released its Budget and Economic Outlook for the coming decade: D.C.’s deficit obsession has been quite effective at cutting deficits at the expense of the still-struggling economy.

“[E]conomic activity will expand slowly this year, with real GDP growing by just 1.4 percent,” according to CBO’s projections. “That slow growth reflects a combination of ongoing improvement in underlying economic factors and fiscal tightening that has already begun or is scheduled to occur-including the expiration of a 2 percentage-point cut in the Social Security payroll tax, an increase in tax rates on income above certain thresholds, and scheduled automatic reductions in federal spending. That subdued economic growth will limit businesses’ need to hire additional workers, thereby causing the unemployment rate to stay near 8 percent this year, CBO projects.”

In other words, intentional efforts to reduce annual deficits and stabilize the debt are working. But if you retrain your gaze from the government’s balance sheet to the real economy, you’ll see the impact of that austerity is fewer people working and slower growth. According to CBO, the recovery won’t really pick up steam until next year, and the economy won’t have recovered until the end of 2017, when it will reach its output potential, and unemployment will fall to 5.5 percent.

Digby:

Oh fergawdsakes:

President Obama’s debt reduction goals are at least $1 trillion too modest, according to the Democrat who chaired the Senate Budget Committee until the end of last year.

SNIP

Over the last few years, Democrats and Republicans have come together and cut our deficit by more than $2.5 trillion through a balanced mix of spending cuts and higher tax rates for the wealthiest Americans.

Really? Does this look balanced to you?




That's what passes for balance in Kent Conrad's mind. I'm going to guess that he'd consider another trillion in spending cuts and slashing Social Security to add up to a 50/50 split. (Let's not even talk about the fact that austerity is the worst thing to be doing right now.