February 28, 2014

AP’s Kuhnhenn: Debt and Deficit Worries Are So 2010

Perhaps I’m being too kind in describing the Associated Press as “The Administration’s Press.” Based on Jim Kuhnhenn’s ridiculous “Don’t worry, be happy” Saturday report on how unimportant he says the still growing national debt and the still historically large federal budget deficits supposedly are, maybe I should start calling the wire service “The Administration’s Publicists” instead.

Kuhnhenn stopped just short of writing that the national debt ($17.41 trillion as of Wednesday, up from $10.63 trillion when Barack Obama took office 61 months ago, an average increase of $111 billion per month) and the annual federal budget deficit (on track to be over $500 billion for the sixth year in a row, four of which saw deficits of over $1 trillion) aren’t worthy of attention, but it’s clear that he believes we shouldn’t be concerned about them in making electoral choices (bolds are mine):

DEBTS, DEFICITS — ONCE A FOCUS — FADE FROM AGENDA

JimKuhnhennAPwide

Just four years ago, deficits and debt were an explosive political combination, propelling Republicans to control of the House and fueling the budget fights that would ensue over the next three years.

Today, they are an afterthought, a dying ember in Washington’s political and policy landscape.

The nation’s annual deficit, the amount the government spends beyond what it receives in revenue, has been cut by nearly two-thirds from its 2009 high, thanks to a combination of tax increases, an improving economy and mandatory across-the-board cuts in programs from defense to transportation to education.

Lawmakers, fatigued by their budget battles, have called a truce and abandoned the brinkmanship that led to unnerving default threats and a partial government shutdown.

As a result, the impulse to cut will be decidedly weaker when President Barack Obama submits his latest budget plan to Congress early next month. The White House drove home the point Thursday when it said Obama’s budget would not include his past offer to cut spending on federal benefits by giving lower cost-of-living increases to beneficiaries.

“It’s hard to deny that there is less political momentum at this moment, in the year 2014, for the type of extensive budget negotiations we saw in 2011 and 2012,” said Gene Sperling, director of the White House’s National Economic Council and a close Obama adviser.

… That doesn’t mean the problem has been solved.

… the public has shifted its anger. The 2008-09 bank bailouts and the stimulus spending that Obama set in motion in 2009 sparked the revolt in 2010 as swing voters – those who might vote for either Democratic or Republican candidates – demanded more fiscal accountability. With another midterm election this year, swing voters appear more concerned about their own personal economic circumstances, and Republicans are focused on making the election a referendum on Obama’s health care law.

The new 2014 deficit projection from the Congressional Budget Office – $514 billion this year from a $1.4 trillion high 2009 – means this year’s deficit would be about 3 percent of the nation’s economic output, good news in that it would virtually match the average percentage of the past four decades.

The reason this year’s deficit might match the four-decade average is because the last six years, including fiscal 2008, have done so much to bring up the much lower average of the 34 years which preceded them.

Kuhnhenn writes as if the deficit for the fiscal year which will end seven months from now is somehow locked in. It isn’t. We won’t know how much the deficit has been cut until the year ends. With the economy weakening, a $514 billion deficit may turn out to have been a rosy scenario.

More to the point, running $500 billion deficits as far as the eye can see (and Kuhnhenn admits that the administration’s projections show them heading back up again in several years) indebts future generation unconscionably. It’s one thing to run deficits to conduct wars if one believes that short- or mid-term national survival is at stake. It’s quite another to run them purely to meet alleged domestic “needs,” even while cutting defense and almost nothing else.

Fortunately, Kuhnhenn’s claim in his role as Obama administration publicist doesn’t square with reality. Those who became politically active five years ago in reaction to the Obama’s stimulus plan are just as concerned as they have always been. Obamacare’s disastrous rollout is now projected to add even more to the national debt instead of being deficit-neutral, as was claimed four year ago. So of course the same people are concerned with Obamacare, along with the statists program’s other serious, freedom-restricting problems.

Properly seen, the disastrous impact of five years of Obamanomics brings the debt and deficit problems into proper focus. Five years of runaway spending and debt buildup have failed to spark the economy to anything resembling a decent recovery. People are starting to understand that their decaying finances and the government’s headlong rush into insolvency are related — but the Administration’s Publicists won’t tell you that.

Cross-posted at NewsBusters.org.

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