10 Updates

Why No One Is Celebrating The Much-Lower Deficit

Apr 15 2014, 6:20pm CDT | by

The basics are straightforward and unambiguous: The Congressional Budget Office yesterday reported that the federal budget deficit will fall to 2.8 percent of GDP this year, almost one-third below...

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14 weeks ago

Why No One Is Celebrating The Much-Lower Deficit

Apr 15 2014, 6:20pm CDT | by

The basics are straightforward and unambiguous: The Congressional Budget Office yesterday reported that the federal budget deficit will fall to 2.8 percent of GDP this year, almost one-third below what it was in 2013.

As a percent of GDP, not only will that be the lowest deficit since 2007, the drop from 9.8 percent in 2009 to 2.8 percent in 2014 is the largest five-year reduction in federal red ink since the end of World War 2, that is, in almost 70 years.

There was no celebration.

The president didn’t appear in the White House Rose Garden to make a statement.

There were no dueling press conferences on Capital Hill to claim credit for the improvement.

And the deficit hawk groups didn’t send letters to their funders saying that this was a monumental accomplishment for which they have worked tirelessly.

In fact, just the opposite occurred. The White House, House and Senate were silent while the deficit hawks focused instead on CBO’s almost certainly inaccurate 10-year projection that showed the debt rising as a percent of GDP from 72 percent in 2013 to 78 percent in 2024.

Why no dancing in the street?

This is one of the few times the real politics of the federal budget deficit are laid bare for all to see.

The White House didn’t take a victory lap for two reasons.

First, it sees the budget as a losing issue and doesn’t want to talk about even good news when it happens. Talking about a falling deficit gives the administration’s opponents the opportunity to say the president can’t take credit for reducing the deficit unless he first takes the blame for raising it so high. Even though much of the deficit increase was already baked into the budget baseline when Obama took office and wasn’t completely his fault, that’s hard to explain and the criticism will hurt.

Second, talking about a falling deficit means you still have to talk about a deficit that to some will seem too high no matter how much it has fallen. It’s the political rather than the economic arguments that are important in Washington, and the current politics of the budget mean that even a $1 deficit would be mischaracterized by some as being evil. Because of that, CBO’s projection of a nominal $492 billion 2014 deficit looks — and can be made to sound — positively catastrophic even when it’s not.

Congress didn’t gloat about the falling deficit because neither house has a good story to tell about what it did during the time the deficit was falling. The House was busy passing hyperpartisan budgets that had no chance of being adopted by the Senate. The Senate either wasn’t passing budgets or was passing budgets the House refused to consider. Neither situation earns you many plaudits.

There was also the fiscal cliff and the shutdown. That’s ancient history but still politically painful.

The deficit hawk groups? They will have no reason to exist or be funded if the deficit is understood to be falling. It’s not at all surprising, therefore, that they focused on the longer term even though the projected increase in the debt as a percent of GDP is barely important economically and a 10-year forecast is basically just a straight line extrapolation. Doing that simply justifies staying in business.

The only real surprise from what happened yesterday is that the Congressional Budget Office wasn’t demonized for its new numbers. In the current environment that lack of criticism is the closest we’re going to anyone saying anything positive.

 
Update
10

6 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

Cambodia's Famous Battambang Circus
KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the D ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

6 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

Collingwood Magpies Training Session
KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was b ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

6 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

Federal Aviation Administration Bans All US Flights To Israel
KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the Dewan ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

6 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Dat ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

6 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

INDIA-CHINA-DIPLOMACY-TRADE
PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the so ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

6 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

Government Weekly Cabinet Meeting
KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 milli ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

6 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Mustapa Mohamed sai ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

6 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

Iskandar Johor Open - Previews
JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an allocation ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

6 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

EurAsia Cup presented by DRB-HICOM - Day One
PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan B ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damansara Skyway (Kid ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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