Over the past several weeks, there has not been a shortage of discussions and commentaries around the debt ceiling. If nothing else, this topic demonstrates that politics involves playing the word game, which sometimes capitalizing on what the listeners do not know. For instance, let’s consider the following phrases/terms: size of government, deficit, and debt.
What is the meaning of size of government? To me, size refers to how big government is … the size of the organizational chart. On the other hand, some use size of government to refer to the amount the government spends. However, amount refers to the number of dollars involved. If the org chart remains the same, a budget decrease means the amount spent decreases while the government’s size remains the same. Of course, some also incorrectly use size of government when they actually mean the role of government.
Does the user mean debt or deficit? The two are not interchangeable terms. The recent debate involves plans for deficit reduction, but not necessary the debt. Yep, they actually agreed upon a budget decrease that reduces the rate of debt increase. That is, the debt still increases.
Deficit and surplus refer to the difference between income and spending – specifically, during a particular 12-month fiscal year. If income is greater, that’s a surplus. If spending is greater, that is a deficit. In other words, deficit and surplus only refer to a one-year period.
Debt is a long-term word involving an ongoing accumulation of yearly deficits. Interestingly, if the surplus does not cover the interest on the debt, a surplus does not reduce the debt. Even the GOP recognizes that it will take 10-years of concentrated deficit reduction to reach a point of the debt not increasing. Yep, at that point, a large debt remains.
The moral of this post is the following. As you either listen or read the commentaries, or even better, read comments and letters to the editor or comments on blogs, take note of these terms and you will notice correct and incorrect use … and misleading use.