According to my recollection of a recent poll, all but two Americans think the deficit is growing. Why? Because that’s what we keep reading in the news stories and in the opinion editorials.
Because I decided a long time ago not to let the headline creators do my thinking for me, I keep updating my deficit chart each month as soon as the US Treasury publishes its monthly statement. Then I ponder it; I keep looking for evidence of the "growing" federal deficit, and I keep coming up empty handed. [By the way, this process invariably confirms for me that it was a good decision not to let the headline creators do my thinking for me.]
Here are a few facts (not opinions) about the chart below:
• One year ago (see 1), the federal deficit was $408.2 billion.
• Today (see 2), the federal deficit is $310.9 billion.
• $310.9 billion is less that $408.2 billion...
• ...therefore, the federal deficit is getting smaller.
A few more facts:
• Federal spending outlays are growing at a 7.6% rate.
• Federal tax receipts are growing at a 14.2% rate.
• 14.2% is greater than 7.6%...
• ...therefore, if those trends continue, receipts will equal outlays in 2.7 years (see 3).
One last, loosely-related fact:
• The next presidential election is 2.7 years from now (see 3). [Won't that be fun?]
Where is this “growing deficit” everybody is talking about?
I keep thinking maybe it will whack us in the back of the head “next month.” But I’ve been thinking that for twelve months now, with no luck. The deficit just keeps trending downward and downward. In any case, one of two things will have to change soon: either the deficit will start increasing, or the rhetoric about growing deficits will have to start decreasing.