But wait - 2.5% isn't a bad number either, historically speaking. Hell, the Growth and Stability Pact undergirding the Euro, that most rigorous of modern currencies and the reserve money of the future according to some, only requires member states to run a deficit of no more than 3.0% of GDP, and both France and Germany have recently exceeded this target on a regular basis). I know, this "great number" happens in a time of strong corporate profits, a relatively good (if undertaxed) capital gains environment, and solid (if not shared) economic growth; just four years ago we were scraping along at 5.0% of GDP on-budget deficits. In this environment, shouldn't we be expecting a surplus, not pissing away the public purse on foreign adventures abroad, contracts for cronies and tax cuts for wealthy benefactors all the while neglecting the public good in extremis?

Imagine my surprise when I happened upon this gem a while back in the English-Language edition of the People's Daily, the official organ of the Chinese Communist Party:

The U.S. federal budget deficit declined to 162.8 billion dollars in the fiscal year that ended Sept. 30, the lowest level in five years, the Treasury Department reported Thursday.

Data released by the Treasury showed that the budget deficit for the 2007 budget year was 34.4 percent lower than the red ink of 248.2 billion dollars in 2006.

For this whole fiscal year, the government's revenue hit a record of 2.57 trillion dollars, while its spending also set an all-time high of 2.73 trillion dollars.

"This year's budget results demonstrate the remarkable strength of the U.S. economy," said Treasury Secretary Henry M. Paulson. "This strength has translated into record-breaking revenues flowing into the U.S. Treasury and a continued decline in the federal budget deficit."  

Well, it's a good thing that America's greatest creditor approves enough to play the story straight. I mean, we know the US press is just going to stenograph the utterances of Bush Administration officials, but if the central bank holding the equivalent of 10% (and growing quickly) of US GDP in liquid US assets is buying it too, we gotta be ok, right? And obviously, the wingnuts approve too. But should we? Is this great news, or not so much?

If we count on the Congressional Budget Office's current projections we'll be back to unified budgetary surpluses by the end of the next President's first term! If there's a fiscal crisis that's endangering Social Security so much Barack Obama wants to help the GOP reform it, it's sure hard to tell from CBO figures. And since the Democrats now control Congress, and the Congress oversees the CBO, and Obama's a Democrat, that can't be bullshit, can it?  The answer is...not so much. CBO estimates, unfortunately, assume a lot of things, like that Dubya's tax cuts expire, economic growth remains relatively robust, US foreign expeditions come to an end, and no one tries to do anything rash like Charlie Rangel's attempts to reform the AMT.

Of course, wingnuttia has a different idea than liberals of what deficits mean and what the federal government means, a difference which boils down to drowning something in a bathtub near you, the future health of Social Security be damned. And the People's Bank of China is looking out for the interest of future Chinese pensioners, not those of Americans, and trying to ensure continued economic growth in the PRC, arguably the largest anti-poverty measure in the history of mankind. So they not likely to be paying much mind to the sort of liberal hair-splitting we engage in, like talking about on-budget versus off-budget deficits - as far as they're concerned, it's all the same, if the US wants to pay for the war in Iraq with regressive payroll taxes intended to fund future retirements, who cares? It's not their problem, nor are future Social Security benefits. But we progressives should be more serious about deficits, shouldn't we?

What if the answer to this were no? Deficits matter, of course. Everything borrowed must be paid, and if it's a government, that's either by future taxes, or the ultimate monetary tax, inflation. But maybe there are more important things than this deficit, and this for reasons diametrically opposed to the reasoning likely animating the wingnuts and the Communist cadres running the PRC.

For while both of these groups probably expect that the US government will simply get future spending under control, gutting social security among other things, if we really believe in the programs we believe in, their need and the American public's desire for them, we should also believe that there's no way the American public would stand by and see them gutted.

It just ain't. Gonna. Happen.

America can stand over a million homeless children this year without saying much. It can let over two million homeowners lose their homes, many of them due to a medical crisis in the family, just this year without passing legislation to help them out.  And it can piss away over a trillion dollars to kill by the hundreds of thousands. But dinosaurs will once again rule the planet before middle-class boomers take losing their Social Security benefits sitting down.

Nothing will focus the minds of the millions of baby boomers at or approaching retirement than the prospect of losing tens of thousands of dollars of annual benefits per beneficiary. Remember the million man march? Think multimillion grandpa march. And if enough folks are mobilized, if enough minds are focused, it just might force the US to abandon the instinctive militarism that has animated it for so long and that it can't afford, and focus instead on the needs of its people. And if America stops sinking billions into hi-tech gadgetry intended to more efficiently kill brown people abroad, it'll be good not just for Americans, but for each and every one of us.

Plus there might be the added benefit of another Woodstock...Joe Cocker, Santana, Joan Baez and Neil Young are still around. (On second thought, given the Kenny G and Ray Conniff Jr. many boomers have graduated to, this might be a bad idea.)

And as for all the short-term happy talk about the success Dubya's fiscal probity, within days of the CBO's announcement, it was already rising again.