True or False? Deficit is falling at the fastest rate in 60 years


Obama cheats. He uses verifiable facts.

President Barack Obama aimed to refocus the national debate and put the economy front and center with a speech at Knox College in Illinois. It was the same place he spoke as a senator in 2005 about the need for the government to help the middle class. He stuck to that theme in this speech, but now as president, he summarized the improvements that have come on his watch.

He talked about millions of new jobs, burgeoning energy production, and the nation’s improving balance sheet. “Our deficits are falling at the fastest rate in 60 years,” Obama told the crowd.

In light of Obama’s ongoing battle with Republicans over taxes and spending, we thought this would be an interesting claim to examine. In this factcheck, we look at whether we are really seeing one of the most rapid declines in the deficit in many decades…

In 2009, the first year of Obama’s presidency, after tax cuts and new spending, the deficit was 10.1 percent of GDP. In 2012, the deficit declined to 7 percent of GDP. So that’s a decline of 3.1 percentage points.

You have to go back 63 years to the period between 1946 and 1949 to find a bigger four-year drop than what the country saw between 2009 and 2012. Right after World War II ended, the U.S. deficit stood at 7.2 percent of GDP. By 1949, America had a surplus of 0.2 percent. So that’s a decline of 7.4 percentage points.

We downloaded data from the Office of Management and Budget that shows the deficit as a percent of GDP all the way back to 1930. When we ran the numbers, we found, as Obama said, you need to go back to 1946 to find a larger change.

Our ruling?

Barack Obama said the deficit has fallen at the fastest rate in 60 years. While economists vary on how to best measure that decline, the president used an acceptable approach and his numbers are accurate. There are no statistical tricks in play…

We rate the statement True.

Which is more than you can say about the junk economics dribbling out the blowhole of Tea Party/Republican losers. Coming from a generally conservative, often pantywaist source like Politifact, I’d say this is strong proof indeed.

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