The Mythical Budget Deficit


— by Rich Dunn, NV Rural Democratic Caucus, 2nd Vice Chair

On Monday the treasury budget for December was released, and guess what. The federal government ran a surplus of $53.20 billion. Yes, I said surplus. It got little attention because budget surpluses have become relatively routine of late. Here are the treasury budgets for the previous seven months:

Jun +$116.5 billion
Jul -$97.6 billion
Aug -$147.9 billion
Sep +$75.1 billion
Oct -$91.6 billion
Nov -$135.2 billion
Dec +$53.2 billion

You’re seeing that right. The budget was in surplus in three of the last seven months of 2013.

The deficit for Fiscal Year 2013 totaled $680.3 billion, which was down from $1.09 trillion in 2012—the fourth consecutive year when deficits were over a trillion dollars. The Obama administration is now running annual deficits less than half the size of the one he inherited from Bush in 2009, and economists are already speculating that Obama’s budget for Fiscal Year 2016 could well be in surplus.

The government should not be running a fiscal surplus when aggregate demand is still lagging in the macro economy. The country’s infrastructure is falling apart and we should be fixing it right now because the money is there and isn’t being used to expand employment or investment in the private sector. Instead coporate balance sheets are hoarding cash and using it to pay special dividends and stock buybacks for the investor class. That money should be put to work investing in America!

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