At his speech on the economy at Knox College, Barack Obama said “Our deficits are falling at the fastest rate in 60 years.”
I have posted many times on how, contrary to the misinformation from the right wing noise machine, the deficit was run up by Republicans and has been falling under Obama (as it previously fell under Clinton). As there is so much misunderstanding as to where the deficit came from, I thought it was worth repeating the evaluation from PoltiFact of Obama’s statement. They judged it as true.
In 2009, the first year of Obama’s presidency, after tax cuts and new spending, the deficit was 10.1 percent of GDP. In 2012, the deficit declined to 7 percent of GDP. So that’s a decline of 3.1 percentage points.
You have to go back 63 years to the period between 1946 and 1949 to find a bigger four-year drop than what the country saw between 2009 and 2012. Right after World War II ended, the U.S. deficit stood at 7.2 percent of GDP. By 1949, America had a surplus of 0.2 percent. So that’s a decline of 7.4 percentage points.
We downloaded data from the Office of Management and Budget that shows the deficit as a percent of GDP all the way back to 1930. When we ran the numbers, we found, as Obama said, you need to go back to 1946 to find a larger change.
There are some caveats in interpreting this, but their conclusion was that Obama’s statement was true:
Barack Obama said the deficit has fallen at the fastest rate in 60 years. While economists vary on how to best measure that decline, the president used an acceptable approach and his numbers are accurate. There are no statistical tricks in play.
When the Republicans threaten a shutdown of the federal government in September using scare tactics about the deficit, keep in mind who ran up the deficit and how it has been decreasing under Obama.
