Millard Grimes: Deficit keeps falling - who knew?

The national budget deficit for the fiscal year 2015, which ended Sept. 30, has been announced by the Congressional Budget Office. The final total was lower than predicted and was $8 billion less than the deficit from fiscal year 2014. More importantly, it was only 3% of the gross domestic product, down from 10 percent in 2009.

That's one of the largest nine-year declines in the deficit in U.S. history and if it had been larger, the economic climate would probably be even worse because federal spending above its income (also known as the deficit) is one of the generators of the overall economy.

But the facts are clear - the budget deficit has declined for seven consecutive years; as a percent of the GDP it is lower than any year since 2007. The deficit is so low it's not even a subject for debate - except at this time of the year when the federal debt ceiling must be raised. A smaller deficit is still a deficit, and the government must have $435 billion more to keep operating than it did in 2015.

That sounds like a lot of money, which is why it's more feasible to judge the budget figures by their percentage of the overall economy, and by that count the deficit for 2015 is a piddling amount. But years ago Congress in one of its penny-pinching moments passed a law that any time government expenditures exceed the previous year's total, the additional debt had to be approved by Congress, a process known as raising the debt ceiling. For years this was no problem. Most congressmen realized that the higher deficit was caused by funds they had already approved and spent, whether at the congressional or executive level. It was not money being appropriated; it was simply to pay for debts so the U.S. government would not become the equivalent of a deadbeat who won't honor his obligations, leaving creditors holding the bag after delivering the goods.

But now each year raising the debt ceiling has become a harrowing battle to the deadline of whether the government will welch on its debts or close down some of its operations.

In 2013, the game of chicken over raising the debt ceiling brought about a short shutdown creating a long-term expense of several billion dollars, loss of face among other nations of the world and no doubt great anxiety among millions of Americans will either work for the government or depend on regular payments of Social Security.

A compromise was reached after the U.S. suffered many indignities, such as a cut in its credit rating - meanwhile the annual deficit has kept shrinking to its total of $435 billion in 2015, which is a 50 percent decline from the $855 billion in 2012 and 70 percent from the $1.2 trillion of 2008-09.

This would seem to be a reason for elation among congressmen who are always calling for a "balanced" budget, but not so. Jody Hice, the new congressman from my congressional district in Georgia, declared in his campaign, "I will never vote to raise the nation's debt ceiling," and he and most other Southern Republicans mean to keep that pledge. They never even explain why fulfilling the nation's financial obligations is not important to them. Their position, I suppose, is that the nation's money supply has been spent, but Congress approved those expenditures while reducing the deficit by a historic amount in the past two years. Where were these budget balancers when taxes on the highest earners were being hacked away or when funds for weapons and planes the Pentagon didn't even ask for were being approved?

In national finance, $435 billion is a rounding adjustment and the budget could be balanced by next year with several simple steps. The most attractive would be to raise the income tax on the top one tenth of 1 percent of the taxpayers, estimated to be about 115,000 taxpayers, who pay an average of 34 to 35 percent on their highest income. A 10 percent increase would bring in enough revenue to virtually erase the projected deficit for 2016. The average income of these taxpayers is $9.5 million a year. You can play with the figures, but even a 10 percent increase in their taxes would leave each payer with $6 million in after-tax income, not to mention other income that the higher earners have from tax-exempt sources.

How about it, Jody? If the deficit is so important, how about asking those payers to pay a little more and still have about 6 million a year left over

These figures, by the way, are from a survey by the Brookings Institute, as reported by the New York Times, all of which may be suspect as liberal institutions, but which have proven reliable.

This may sound radical, but it isn't. What is radical is the that the government has reduced the deficit by about 70 percent over the past nine years and still has a problem with keeping the debt ceiling at a level to meet obligations, while in the same years, taxes have been reduced on the highest income earners in the nation. That is a radical development that has led to stagnation and disruption in many nations in history. The United States was founded in part to avoid it.

Only kings lived the kind of lives 1/10 of 1 percent of American taxpayers have today. The wisest kings found ways to share their nations' bounty. The unwise kings just lost their heads.

Millard Grimes, editor of the Columbus Enquirer from 1961-69 and founder of the Phenix Citizen. is author of "The Last Linotype: The Story of Georgia and Its Newspapers Since World War II."

This story was originally published October 26, 2015 at 12:00 AM with the headline "Millard Grimes: Deficit keeps falling - who knew? ."