It’s Bigger than a Breadbox

September 29th, 2006



We’ve said before in this space that conservatives believe deficits don’t matter. And now here is further proof—conservatives are so indifferent to the federal deficit that they aren’t even sure how big it is.

The deficit number put out by the Congressional Budget Office—$319 billion for fiscal 2005—is actually only one of two “official” numbers on the budget deficit. The other number is put out by the Department of the Treasury in a less-than-widely-circulated report called “The Financial Report of the United States Government.” Incidentally, the difference between the two deficit numbers is a mere $441 billion.

According to Congressman Jim Cooper (D-TN), who has been publicizing the existence of this report, the Treasury gets to a deficit figure of $760 billion for fiscal 2005. Its accounting method is different, but more accurate, because, as Cooper says, “it’s the same method that all large American businesses are required to use.” If this discrepancy is a concern to conservatives, they sure are not showing it.

We think that deficits do matter. First and most importantly, they have a bottom-line impact on middle-class pocketbooks because deficits raise interest rates. As our report found, a 1% hike in interest rates can cost a middle-class family as much as $1,700 in excess interest costs. Second, paying interest on the federal debt is a colossal waste of taxpayer dollars—as it is, one out of every 12 taxpayer dollars is wasted on paying interest on the national debt. And third, if conservatives can’t be trusted to keep track of as simple a number as the federal deficit, how can they be trusted to secure our borders, protect us from terrorists, grow the economy and help middle-class families reach their dreams?

Well, the answer is, they can’t.