The latest deficit news from President Cut-the-Deficit-in-Half-in-In my piece called "Get Ready For The New Normal" I talked about how people are willing to accept outrageous gas prices because they've dropped a bit from record highs. People have already forgotten that prices were half what they are today when Obama took office.
The U.S. federal deficit was slightly smaller through the first five months of the budget year than the previous year. Still, the imbalance is on pace to exceed $1 trillion for the fourth straight year, which could be an issue in this year's presidential election.
The Treasury Department said Monday that the deficit grew by $232 billion in February. That increased the imbalance through the first five months of the budget year to $581 billion, or 9 percent less than the same period in fiscal 2011.
The Obama administration expects the deficit will reach $1.3 trillion when the budget year ends on Sept. 30. That would nearly match last year's gap. The government ran a record deficit of $1.41 trillion in 2009 and a $1.29 trillion gap in 2010.
two key sentencesThe deficit reached a then-record of $458 billion during Bush's last year in office. . . . The deficit surpassed $1 trillion for the first time ever in 2009 and hasn't been below that level since."
But wait, Tyler Durden of Zero Hedge, what does that mean?
A few days ago we noted that based on preliminary data, the February budget deficit would hit $229 billion (yes, nearly one quarter of a trillion in one month, about where real Greek GDP is these days) -- the largest single monthly deficit in history. Unfortunately, this number was low: the final February deficit was just released and the actual print is $231.7 billion.
The same phenomena is occurring with budget deficits. The deficits we were told were outrageous by people like Nancy Pelosi during the Bush Administration are 1/3 to 1/2 of what we've seen every year since Obama took office, but where's Nancy now? She's eagerly signing on to these massive budget bills and voters just aren't paying attention.
Unfortunately, I doubt this will be as big an issue in the election as it should be.