VIDEO: Dear GOP, We are currently experiencing the fastest deficit reduction in several generations.


chart deficits lower under Obama

Rachel Maddow sets 90% of America straight about the deficit. Now if only they'd listen:

See how it's spiraling out of control? See how much it's growing? Higher and higher all the time. Yeah, no.

Actually, down is not up. Night is not day, and the deficit is getting smaller. It's dropped by hundreds of billions of dollars during Barack Obama's presidency.

We are currently experiencing the fastest deficit reduction in several generations, and nobody knows it.

We're in the midst of a major national crisis, self-imposed, brought on by fear and loathing and worry and outrage over the supposed state of the deficit, and 90% of the country is wrong about what the state of the deficit is. I'm not saying 90% as a made-up rounded hyperbolic number. That's the actual number.

Here's the entire segment which includes a wonderful recap of the day's news in the first few minutes of the video. "And.. and.. andandandandand... It's that kind of news cycle." Watch:

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  • Thank you Dr. P---ko.  I paid attention in your economics class!!!

  • Another point... A low debt-to-GDP ratio indicates an economy that produces a large number of goods and services and probably profits that are high enough to pay back debts. Governments aim for low debt-to-GDP ratios and can stand up to the risks involved by increasing debt as their economies have a higher GDP and profit margin.  It's a measure of financial leverage.  That's why when I recently refinanced my mortgage they asked for proof of my income and the LONGEVITY of employment.  It shows that I make good on my income.  My positive credit rating shows that even when our household make more income, we logically tend to spend more, but we keep paying our bills on time.  We make investments in capital, like a new car, or furniture to replace the ones our kids destroyed  etc.  

  • William GDP is made up of consumer spending and government spending, but it's also made up of investments made by industry like buying more lawn mowers and employees to mow more lawns because of growth you've made in your business.  GDP also increases when there are more exports over inports.  So now other countries or in your case, neighborhoods, are requesting our services because we of our positive performance.  You are acting like only two variables are affecting the GDP and that they are in perfect ratio to each other...

  • Deficit as a share of GDP is a really handy fiction that economists have invented to disguise the problem. What actually matters is the deficit as a share of government revenue. If the government is borrowing half of what it is spending, whether the economy goes up doen't matter; it is still borrowing half of what it is spending. The GDP can quadruple, and the deficit as a share of GDP can drop to one fourth, and the government is still borrowing half of what it is spending.

    Yes, supposedly government revenue goes up as GDP goes up, but the relationship is by no means linear. Much of GDP is actually offshore earnings and is in loopholes and deductions. Bernanke is buying mortgage bonds, and that transaction increases the GDP, but that is totally unproductive in any meaningful sense, and it adds not one penny to federal revenue. It does, however "decrease the deficit as a percentge of GDP" because it increases the GDP.

    What is happening to the defecit as a portion of government revenue? It's still going up.

    Tell you what. Next time the bank gets shirty with you about your house payment, tell them they should not worry because your employer is doing well and your debt as a ratio of your employer's income is a very small fraction. Tell them that your income hasn't increased, but that since your employer's income has increased they should not worry about you making your house payments. See what they say. They will tell you your employer isn't making your house payments and that they don't care about your employer's income. You are making your house payments and it is your income that they care about.

    GDP is a nonsensical fiction anyway. If I pay you to mow my lawn and you pay me to mow your lawn we are increasing the GDP, but the amount of lawn mowing is precisely the same. If some jackass pays somebody else to hold some money in a box, the payment is increasing the GDP, but it's just paper. GDP measures how much cash is moving around, but not what it is doing. We are consuming and destroying, applauding an increasing GDP while not making any capital apprectiation either structurally or monetarily.

  • Sally the right will never see this on Fox business...why, it would blow their whole theory all to hell. Can we send it to them anyway?