Why are we even talking about the deficit? It is only 5% of GDP

[BlueStreak]

I went to the FRED site and pulled the GDP numbers for the last half-century. I never trust the "deficit" numbers because there have been all sorts of crooked off-the-books accounting tricks over the years. However, the national debt numbers are reliable, and if you take the difference at the end of each fiscal year compared to the prior year, that is the best measure of the real deficit.

When you take the latest CBO projection for the FY2013 deficit, that works out to slightly over 5%. And guess what? That is not much different from all of the Bush II years, and substantially LOWER than the Reagan / Bush I years. And this is with unemployment still near the 8% mark. If we could bring unemployment down to 6%, we would have historically low deficits.

Why are none of our politicians talking about the real problem?



Some notes about these time lines: The bars are for the fiscal years that run October-September. With each change in President, you have a fiscal year where the outgoing President is in office 4 months and the incoming President is in office 8 months, but mostly operates under the policies and budget of the outgoing President. These years are indicated as purple. The bars indicating control of House and Senate are linked to the fiscal year that BEGAN when that body was in office, because they are the ones that approved the budget and most of the appropriations for that fiscal year.

[djean111]

1. Because the 1% do not want to pay any taxes at all.

They do not want to contribute to Social Security or Medicare or Medicaid.
They do not want any government regulation whatsoever - no taxes to pay for regulations, no regulations that might cost a penny of profit.
Right now they only value the way the government takes middle-class taxes and gives that to them as subsidies.
They want everything privatized.
They are Ayn Rand - they are just greedy and soulless.
And anyone who keeps braying that social security is part of the deficit is one of them.

[BlueStreak]

3. I understand the 0.1%. But that doesn't explain the absence of straight talk

from Democrats in general.

Once again, the Republicans have mastered the art of setting the agenda. Where are Democrats standing up and saying, "This is bullcrap. We don't have any deficit problem that won't be solved by addressing the employment and economic growth challenges."

Has Obama said this? Pelosi? Reid? Any other prominent Democrat?

[CincyDem]

2. It's the Voodoo Economics part of King Ronnie's legacy

It's because this is convenient "whipping topic" that repubs can use on BHO. They had little concern when BushCo was fighting two wars and picking up the Part D tab...all off the books. I think that big spike in the front end of BHO term was a combination of GDP slowdown and putting the wars on the books.

To your specific question - what do you think is "the real problem"?

By implication is sounds like you're calling out unemployment (apologies if that's an inaccurate assumption - just feels that way).

My vote for "the real problem" would be the wholesale and insidious upward transfer of wealth that is being structuralized in virtually every part of the economy. Addressing unemployment is an important subset of that but it also includes ensuring that employment provides not just a living wage but a sustainable wage (one that nurtures individual growth). It includes elimination of predatory lending practices that disproportionally punish those trying to dig out. It includes a financial regulatory environment that isn't built and controlled by the very people it's intended to regulate.

I could go on but to me - the real problem is at the core of the US Economy, we're built to transfer wealth upward. Until that changes, everything (including 6% or 4% unemployment) will be window dressing.

[BlueStreak]

4. Those are two sides of the same coin

The structural unemployment results directly from the siphoning of resources that land disproportionately in the hands of the 0.1%.

I would say that unemployment, economic growth, transfer of wealth to the richest, and the trade policies that reward the 0.1% for killing jobs are all the same problem under different names.

[ElboRuum]

5. Because it suits the Republican agenda...

Say deficit enough times and people will glom on to the old trope about government's inability to manage its financial affairs, thereby creating a climate of a public will to smaller government delivering fewer services.

The deficit is a red herring that gets trotted out every time Republicans feel the winds are blowing in a generally liberal direction.