Dean Baker on the debt ceiling deal

The protracted negotiations over the debt ceiling, as well as the final package agreed to by President Obama and the congressional leadership, show what happens when a small minority is allowed to gain control over national debate. While polls consistently show that the vast majority of the public sees jobs as the main problem facing the economy, there has been a well-funded crusade to ignore public opinion and make cuts to social insurance programs and other spending the top priority for Congress and the President.

To further this effort, the anti-deficit lobby has been willing to rewrite the history of the downturn and the deficit. The data clearly show that the large deficits of recent years follow from the downturn caused by the collapse of the housing bubble. Prior to the downturn, the deficits projected for 2009 and subsequent years were relatively modest. In fact, even with the tax cuts, the cost of the wars, and the Medicare prescription drug benefit, the debt-to-GDP ratio fell from 2004 through 2007.