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As we discussed in May, the federal government recently raised taxes and cut spending, which invariably means a smaller deficit. This remains a basic budgetary truism that Republicans continue to resist. Indeed, last year, when top marginal rates increased on households making more than $400,000 a year, a variety of GOP lawmakers argued that this would likely cause the deficit to go up – as they saw it, higher taxes on the wealthy would slow growth, which would mean fewer jobs, which would mean fewer people paying income taxes, which would mean a larger deficit. And we now know they were wrong – again – though this will probably do nothing to shake the Beltway perception of the GOP as the “fiscally responsible” party. Let’s also note that the shrinking deficit – we’re seeing the fastest reduction since the end of World War II – is also one of the nation’s best-kept secrets. It was just last year when an independent national poll asked Americans whether they thought the deficit was increasing, decreasing, or staying about the same. Only 6 percent of the country recognized reality. That’s not a typo; it was just 6 percent. The fact remains, however, that the annual budget deficit is on track this year to have shrunk by about $900 billion since President Obama took the oath of office. Responding to the news today, a Republican spokesperson for the House Budget Committee told The Hill, “Too many families are living paycheck to paycheck, and if this report is any indication, things aren’t getting much better. We need to get spending under control, so we can build a healthy economy and expand opportunity for everyone in this country.” It’s the sort of quote that helps capture everything that’s wrong with the debate over the deficit. If the economy is struggling, the GOP argument goes, it’s imperative that Congress take capital out of the system and reduce demand. By most sane measures, that’s bonkers, but Republicans won’t let their uninterrupted streak of being completely wrong get in the way of ridiculous rhetoric.
via Budget deficit remains on track for six-year low | MSNBC.