Blazing Republican supernova, Rand Paul, is emerging as the most media coverage-getting potential 2016 candidate, and while there's a good chance he'll end up being that year's Michele Bachmann, there is one thing he keeps repeating that requires a little clarification. It's become one of those things that folks just "know" about the world, even though it's utterly untrue. And since the best way to counter any piece of misinformation is with an attractive and enlightening chart or two, I thought that's what the situation needed.
Yesterday, Bloomberg's Joshua Green interviewed Paul, and when asked about the significant budget cuts he was proposing, the senator said this: "You know, the thing is, people want to say it’s extreme. But what I would say is extreme is a trillion-dollar deficit every year. I mean, that's an extremely bad situation. I would say it's a very reasonable proposition to say that we would only spend what comes in."
First off, saying "that we would only spend what comes in," i.e. that the federal government will never run any deficit, is not only not "reasonable," it's basically insane if you know the first thing about fiscal policy and its effects on the national welfare. But let's leave that aside for now. What about these trillion-dollar deficits every year? Actually, according to the latest Congressional Budget Office (CBO) figures, the deficit for 2013 will be $642 billion. That's a lot of money to you and me, but it isn't a trillion dollars, and it's the lowest deficit since 2008. The CBO is also projecting that in 2014 the deficit will fall to $560 billion, and in 2015 it will fall further, to $378 billion.
Those projections will inevitably be revised over time. Maybe the deficit will actually be larger, or maybe it will be smaller. One thing we can say for sure though, is that for the moment at least, there are no more "trillion-dollar deficits," not every year, and not any year. In fact, the reduction of the deficit over Barack Obama's term has been nothing short of stunning. In 2009, Obama's first year in office, it was $1.4 trillion. That's what happens when you have a financial crash that immediately requires massive spending to keep the country from implosion at the same time that tax revenues have plummeted. The 2013 deficit is going to be less than half of what it was at its peak. It's amazing that the people who claim to care so deeply about the deficit don't seem to have a handle on this rather essential fact.
I know, I promised you charts. Well, here's the budget deficit since 1975, in constant 2005 dollars. I've put the Obama years in blue, and the CBO's projections for the next five years in green:
And here it is as a percentage of GDP, if that's your thing:
Of course, you may believe (as I'm guessing Rand Paul does) that even deficits of the size to which we've pummeled them down in the last few years are still too big. If that's your position, you should make that case. But just repeating the phrase "trillion-dollar deficits" over and over as though they were something other than a thing of the past is either ignorant or dishonest.