Obama just gave a speech about the whole debt ceiling and government shutdown fight.
And one of the points he made is that the fight isn’t actually about the deficit, which has fallen dramatically lately.
And that’s true, the deficit has fallen dramatically. The GOP response to this is that the only reason the deficit has fallen is because of spending cuts extracted during previous fiscal fights.
But this isn’t true! And here’s the chart to prove it.
This chart shows the deficit as a percentage of GDP (red line) vs. the unemployment rate (blue line).
Since 1980, the chart is clear: The deficit is a function almost entirely of the economy. When the economy improves, and unemployment goes down, the deficit improves. When the economy worsens, the deficit widens. That’s what’s made the deficit come down.
There’s no benefit to the economy or the deficit from getting into fights over the debt ceiling