uzzCharts is probably the only conservative column in America that was happy last week about the media feeding frenzy regarding the President’s State of the Union speech. That’s because the State of the Union/uranium-gate story sucked enough oxygen out of the previous week’s new-largest-deficit-in-history story to drop it from super-frenzy status down to regular-frenzy status.
This is a good thing because almost all the deficit coverage was wrong. The announcement by the Office of Management and Budget that the projected 2003-04 deficit would be $455 billion quickly morphed into the inaccurate assertion that this was the largest deficit in American history. It is not. The largest deficit in history occurred in 1943 under FDR; the second largest deficit in history occurred in 1945 under Harry Truman; the third largest deficit in history occurred in 1944 under FDR. When adjusted for inflation and expressed in 1996 dollars (the base line used by the OMB for their record keeping) those deficits were: $499 billion, $421 billion, and $419 billion, respectively. The current deficit, adjusted into 1996 baseline dollars, is $388 billion, which makes it the fourth-largest deficit in recent history, not the first. The most reasonable basis of comparison is not only to adjust the numbers for inflation but also to adjust the numbers for variations in the size of the economy. If concern over deficits is based on their impact on the overall economy, then their relative size to the overall economy is the most relevant statistic. By that standard, moving from largest to smallest, here is the ranking of federal deficits as percentages of GDP:
Deficits can be a cause of concern but the current deficit is ranked as the 15th largest since the beginning of World War II. Given the fact that the current deficit is also occurring during a time of war, it is well within the mainstream of deficits in U.S. history and it is certainly not the end of the world. — Jerry Bowyer is a talk show host on WPTT radio in Pittsburgh, Pennsylvania. He can be reached through www.BowyerMedia.com.