Over at Red State, Dan Spencer calls attention to the fact that today is a notable day:
“Deficit Day” is the date by which federal tax revenues run dry and the federal government begins adding even more debt on top of our exploding $16 Trillion national debt. This year Deficit Day falls on September 10th.
Two economists, James R. Harrigan & Antony Davies, stress the importance of this observance in their great article:
If lawmakers produced a balanced budget, Deficit Day would occur on December 31st, when the government spent the last dollar of its annual tax receipts at the stroke of midnight on New Year’s Eve. But we haven’t seen a balanced budget since the Eisenhower administration.
Conventional wisdom holds that the Clinton administration ran surpluses. But this is a twisting of the facts. It is true that the debt held by the public-which excludes money the government borrows from the Social Security trust fund-declined by $433 billion from 1997 to 2001. But, over those same years, the government borrowed $827 billion from the Social Security trust fund. In other words, the only way to claim that the Clinton administration ran surpluses is to admit that the government has no intention of paying back that $827 billion it borrowed from Social Security.
The latest that Deficit Day has fallen in the past 40-some years has been mid-December, at the end of the Clinton administration. The earliest was the beginning of July, during the Great Recession in 2009.
I particularly like the part about the Clinton surplus and Social Security. The logic of declaring Clinton surpluses is the same logic inherent in the idea that Social Security is Pay-as-you-go (PAYGO), about which I have written many times.
The gimmick accounting that our federal government employs would get you thrown in jail in the private sector. The gimmick borrowing-plus-money-printing that our government employs would make you ineligible to be credit-worthy for anything.
It’s Deficit Day!