By Peter Galuszka
I can’t help but being amused every time I see another chart showing the plummeting U.S. federal deficit.
In June, it was 4 percent of GDP, well down from 10 percent ($1.4 trillion) at the start of the Great Recession in 2009.
Where are all the scary stories you used to read in Bacon’s Rebellion? Whatever happened to the Baconauts who were disciples of “Boomergeddon,” the book that showed the lawn chair on a tropical island facing a nuclear bomb detonation. That was a very frightening image.
The problem, according to Paul Krugman, one of my favorite columnists, is that people still believe deficits are dramatically out of whack because politicians still tell them that.
He notes: “Thus Eric Cantor, the third-ranking Republican in the House, declared on Fox News that we have a ‘growing deficit,” while Senator Rand Paul told Bloomberg Businessweek that we’re running a ‘trillion dollar deficit’ every year.”
I can’t speak for Paul but I do remember interview Cantor a few years ago during the financial crisis and he actually told me that “we have to get the government out of the capital markets.” I asked him why, then, did he vote for TARP, which put the feds directly in those markets. There was a pause of about 20 seconds and then he said, “Well, it was a crisis.”
Just like the deficit, you Baconauts out there!
