One of the major growth industries in Washington is the promotion of budget hysteria. Well-funded groups have weekly, if not daily, events designed to hype the country’s budget situation. Much of the national media, most importantly the Washington Post, have enlisted in this effort, devoting both their opinion and news sections toward this goal.

Unfortunately for the deficit-crisis industry, the facts may stubbornly refuse to cooperate. Any discussion of the deficit requires separating out the short-term and the long-term story. The short-term story is very simple. The economy collapsed in 2008 when the housing bubble burst. That is the story of the large budget deficits that we have seen in the last five years: full stop.

Fans of the Congressional Budget Office (CBO) can go back to see their projections from January of 2008, before CBO recognized the consequences of the bursting bubble. The deficit had been a modest 1.2 percent of GDP in 2007. The deficit was projected to stay near 1.0 percent of GDP over the next three years until the end of the Bush tax cuts was projected to push the budget into surplus in 2012. Even if the Bush tax cuts had not been allowed to expire the country can literally run deficits of 1.0-2.0 percent of GDP forever.

There were no huge new permanent spending programs or tax cuts put in place in 2008 or 2009. The deficit soared because the recession sent tax revenue plummeting and caused spending on programs such as unemployment benefits to jump. There were also temporary measures designed to counteract the downturn, like stimulus spending and the payroll tax cut. However had it not been for the downturn, these policies never would have been implemented.

This means that in the absence of the downturn, there is no short-term deficit problem. There would be nothing for the deficit crisis industry to do.

In the longer term the deficit-crisis industry can point to scary projections of large deficits in the next decade and even bigger ones further out. These deficits were overwhelmingly driven by projections of exploding health care costs. The United States already pays more than twice as much per person for its health care as do people in other wealthy countries with nothing much to show for it in the way of outcomes. The scary deficit projections assume that this gap in health care costs will continue to grow.

However it now looks like health care costs may not be following the path assumed by CBO and other official forecasters. The GDP data for the third quarter released last week showed that real spending on health care fell for the second consecutive quarter and that nominal spending grew at just a 0.5 percent annual rate.

In fact, the rate of growth of health care spending has been remarkably muted for several years. Nominal spending on health care services has risen by just 4.5 percent over the last year and a half. This compares with an 11.0 percent increase in overall consumption spending during the same period. Spending had been projected to grow at nearly twice this rate.

While it is still too early to draw definitive conclusions, it seems that health care costs in the United States may actually be stabilizing. If this pattern continues then we won’t have a long-term deficit problem. If our health care costs were in line with those in other countries, we would be looking at projections of long-term budget surpluses.

Bringing health care costs in the United States in line with costs in other wealthy countries should not be an impossible task. After all, the U.S. can’t be that much more corrupt than Italy, Spain, or the other countries that have managed to contain their health care costs. However most of us thought it would take major policy changes to contain health care costs, such as a universal Medicare system or at least giving people the option to buy into the existing Medicare system.

If it turns out to be the case that the existing structure – perhaps with a push from the reforms included in the Affordable Care Act – is sufficient to contain costs, that would really be great. At least some of the money that employers would have otherwise used to pay insurance premiums will now go to higher wages. And the long-term budget horror stories will largely disappear.

Of course this improved budget outlook would be bad news for the deficit-crisis industry. After building up so much momentum over the years and raising so much money from millionaires and billionaires, they would suddenly lack a purpose. This could cause the deficit crisis industry to go out of business. It is always unfortunate when people lose their jobs, but in this case it would be for a good cause.