Posted on 07/12/2007 4:52:55 AM PDT by Brilliant
Red ink in Washington is invariably an excuse for raising taxes, so perhaps falling deficits should be a reason to cut them. The Bush Administration's midsession budget review, released yesterday, estimates that the deficit will have shrunk by more than 50% in three years: to $205 billion in the fiscal year ending this September from $413 billion in 2004. As a share of the economy, the budget deficit is expected to fall to 1.5%, well below the 40-year average of 2.4%.
Buoyant tax revenues are the major reason for this deficit reduction. So far this year tax receipts are up 7.5%, and that follows two years of double-digit increases. Federal tax receipts since 2004 are up by nearly $700 billion -- the largest ever revenue gain over a similar period. Tax collections have been so resilient that many private forecasters and the Congressional Budget Office are predicting a budget deficit well under $200 billion by year's end.
After the fiscal blowout of Mr. Bush's first term, federal spending is finally starting to slow, with this year's increase estimated to be a more sustainable 4.7%. Medicare is still the entitlement that ate the taxpayer -- up $42 billion, or 13%. Congress is set to expand federal health-care expenditures by another $25 billion or so next year with more funding for the states to pay for health programs in the name of children that increasingly cover adults. Because the states have built record budget reserves over the past two years, it's not clear why the indebted feds should be giving states more money.
The bright fiscal picture is especially impressive given that we have the fiscal burden of spending $173 billion this year to fight the war against terror in Afghanistan and Iraq...
(Excerpt) Read more at online.wsj.com ...
The fact that we are “elated” over a 250 Billion dollar deficit speaks volumes about our fiscal irresponsibility.
This is a two edged sword. It’s a positive that the economy is humming along so well that record tax revenues are shrinking the deficit, but it’s a negative because politicians on both siades of the aisle will just see this as a bonanza of money to spend on more entitlement programs.
True. They could easily have balanced the budget this year or last.
“These are the good old days”, economically. Can’t deny the wealth being generated by this economy.
With the feds pumping billions more into the inflated medical care system, no wonder they are poised to extract money from the equity funds and hedge funds on Wall St. by making them pay more than the 18% capital gains taxes they’ve paid for 20 years. How dare they make more money than members of Congress, who make nothing of value and screw up everything they touch.
Microsoft learned the hard way that you’d better pay the extortionists in Washington protection money or they’ll haul you into court for years. That’s why corporations are giving to Hillary, hoping to buy her off should she be #44. This is not the country our Founders had in mind 231 years ago.
It’s becoming pretty clear, I think, that the reason for the chronic deficits is the decline of the net cash flow from medicare and social security. Unless they do something to fix medicare and social security, it really doesn’t matter who’s in charge—the deficit is going to go up in the long term.
I would suggest your read Walter William’s article about deficits and their historical importance in economic growth.
http://www.townhall.com/columnists/WalterEWilliams/2007/01/17/trade_deficits_good_or_bad
For that amount of money we should be able to just buy both nations.
WHere did all this money for the wars come from?
They kind of talk out of both sides of their mouth with that one. The next couple of sentences says that defense spending is not much higher than during peacetime. So obviously, the deficit has little to do with defense spending.
I think we are.
that is because all of the WOT money comes from supplemental bills Bush sends to Congress,in addition to the enormous 450 or so billion dollar DoD budget
the problem is that some of this (at least for the last fiscal years) was done by accounting sleight of hand.
The general fund (what congress can appropriate) faced a 574 Billion dollar defecit 2 years ago, and a 595 billion dollar defecit last year. It was actually worse last year as the papers were saying it was a smaller defecit. The large defecits were offset using large “loans” from FICA to the general fund.
so while the government was taking in more money, the general fund defecit was higher, and alot of the higher recepits were due to FICA, which offset the increased spending of Congress and the WH
Cutting taxes increases jobs and receipts every time. The co-clintons raised taxes and caused a Recession/Dafficit.
Pray for W and Our Troops
As a percentage of total GDP, defense spending has taken up a smaller chunk of the pie. The big killer that keeps getting bigger and will continue to get bigger to the point of suffocating us unless some reform is enacted is the non-discretionary spending.
My definition of wealth:
(Income - expenses) - (Assets - DEBT) = Wealth
A vast number of people and our government are borrowing beyond their means with no repercussions.
You have a unique definition. Most people consider Assets contributing to Wealth and Debts decreasing them.
Oops, nice catch thackney. Apparently Im in need of more coffee.
(Income - expenses) + (Assets - DEBT) = Wealth
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