Economics 101: The National Deficit Under The Obama Administration

In a speech President Obama made on the 5th anniversary of the financial crisis, the president stated that his administration had cut the deficit in half. There was this unison pushback from the right stating the reason for this was it had skyrocketed in his first year of office 2009. President Obama said:

Our deficits are now falling at the fastest rate since the end of World War II. I want to repeat that. Our deficits are going down faster than anytime since before I was born.

In fact, the deficit has fallen faster than it has in decades. The Congressional Budget Office (CBO) put out a report that stated through the first 11 months of fiscal 2013, the budget deficit was down 35 percent from the comparable period of 2012. Obama detractors try to minimize these accomplishments by arguing that the reason for this is that it was so high in the first place. In 2008, the deficit was about $458 billion. In 2009, it rocketed up to $1.4 trillion. It stayed above the trillion-dollar mark for 2010 through 2012. With the Bush Tax cuts and the financial crisis and unfunded wars tax revenues declined while the cost of government recovery programs rose.

Firstly, in my research on this story, I came to understand that people confuse the debt with the deficit. This is so very vital cause the right-wing media and other factions and influences have gone out their way to confuse the two. The major factor for this is our national debt has never been higher. Our debt is the result of our deficit. So, common sense tells you must strive to turn your deficit into a surplus so you can, in turn, pay down the debt.

Firstly, in my research on this story, I came to understand that people confuse the debt with the deficit. This is so very vital because the right-wing media and other factions and influences have gone out their way to confuse the two. The major factor for this is our national debt has never been higher. Our debt is the result of our deficit. So, common sense tells you must strive to turn your deficit into a surplus so you can, in turn, pay down the debt.

 

Republicans have preached from the hilltops that Obama causes the deficit. However, the facts clearly show no president in recent history inherited the mess did our present president. Bottom line, President Obama in 2009 was facing budget problems of epidemic portions and President Obama had nothing to do with it but “straighten it out.”

Also, let us not forget the obstruction going on that has led us to this government shutdown.

Basic Economics -Lesson 1, seems to be in order, as this shutdown gives the populist pause to ask the question ” what’s going on here?”  Further, this is news, big news, with 2014 elections soon to be heating up.

What’s also ironic in 2009 is that the budget that Obama was given to work with at the time was historical for all the wrong reasons. There is an old saying from the south, ?”don’t stick your hand in a hornet’s nest.” That was the grand prize President Obama walked into concerning the deficit and the debt.

The Cato Institute is widely known to be a right-wing think tank. Published this article by Daniel Mitchell entitled? Who’s To Blame For This Massive Deficit. So, this is no liberal assessment of the situation.

Basically, what we have seen happening is a pushback from the right-wing media claiming it was the House and Senate who were controlled by the Democrats and should be blamed. No sooner than President Obama stepped into his presidential shoes, the right-wing media started their hammer away at the lie “It’s Obama’s Budget, It’s Obama’s Fault.” The fact is, the budget date for the fiscal year 2009 was signed off by Bush on June 4-5 2008.

Right now, in terms of Deficit,” How you like me now,” comes to mind. The Budget and Economic Outlook: Fiscal Years 2013 to 2023, from the non-partisan Congressional Budget Office (CBO) published this statement:

“If the current laws that govern federal taxes and spending do not change, the budget deficit will shrink this year to $845 billion, or 5.3 percent of gross domestic product (GDP), its smallest size since 2008.”

So with our country now in Day 15 of Government shutdown, this should be encouraging news for ones who have seen this slow but forward recovery get to these numbers. It seems like it will be a major talking point to come in 2014 elections. Anyway, you shake it this is great news for our country and just another reason to open this government up for business.

 

 

 

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