The Washington Post tells us that $407 billion deficit newly projected for 2008 is a "near-record." It isn't, the deficit measured as a share of GDP is 2.8 percent. Even adding in the borrowing from Social Security would only get us a bit over 4.2 percent, well below the deficit of 6.0 percent of GDP in 1983. The Post article does give the deficit measured as a share of GDP, but the lead is the discussion of the near-record deficit. Focusing on just the nominal deficit, without comparing it to GDP is just nonsense. The United States also has the largest debt and deficit in the world. Is there anyone who would prefer the fiscal situation of Zimbabwe, even though its deficit is not even a tenth as large as the U.S. deficit? The media should be focused on presenting information in ways that are informative. Telling us that the 2008 deficit is a "near-record" is misleading, not informative. The WSJ also deserves grief for saying the deficit "doubled" in its headline. So what? Suppose the deficit had been $40 billion in 2007, then it would have increased by a factor of ten. Again, the point is supposed to be to provide information, not scare people, right?
--Dean Baker
