The Disappearing Deficit

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DUBYA'S DISAPPEARING DEFICIT

October 12, 2006 -- President Bush took a moment yester day to point with pride at a re election campaign promise kept: He vowed two years ago that his tax cuts would produce enough new revenue to cut the federal deficit by half in five years, and the latest figures show they've done just that - three years early.

It now stands at $247.7 billion - down from $520 billion in 2004.

And it's continuing to drop.

"These budget numbers are proof that pro-growth economic policies work," Bush said.

You'd think that Democrats - they are patriotic Americans, after all - would revel in the good news. Ha!

"Only a president with such a historically bad economic record would be this excited about a $248 billion deficit," said Manhattan Rep. Carolyn Maloney. "Under his watch . . . record surpluses turned into record deficits as far as the eye can see."

Really?

A recession was already under way when Bush took office in 2001, and 9/11 severely damaged the economy (especially in New York).

But then came the tax cuts - and swiftly the economy was growing at a 4 percent annual clip.

(A repeal of the tax cuts is a major plank of the dims.)

Some 6.6 million new jobs were created since 2003 - and unemployment has practically hit rock bottom.

In 2004, desperate for something negative to grab onto, Democratic presidential candidate John Kerry complained about how the new jobs paid paltry wages.

Wrong again.

Employee compensation has been rising steadily since 2003, and in the second quarter of 2006, it grew faster than the rate of GDP growth for the first time since 2001.

Now the only thing left for Democrats to complain about is the budget deficit. (See above, Rep. Maloney.)

Or listen to House Minority Leader Nancy Pelosi: "President Bush's economic policies have resulted in budgets [that] are drastically out of balance and a skyrocketing debt."

Disregard momentarily that deficits are a product of spending, not revenue - which, incidentally, has grown $521 billion in the last two years alone.

Then consider that the deficit has been in steady decline all year.

In January, the federal Office of Management and Budget was projecting a $423 billion deficit for the current fiscal year. Last week, that projection was revised to $247.7 billion - around 1.92 percent of GDP.

That's well below the 40-year average deficit of approximately 2.3 percent of GDP.

And consider this: If economic growth were to hold steady, and Congress held spending hikes to no more than the rate of inflation, next year the federal budget would be back in the black.

Alas, Congress has been spending as fast as the checks can be written - increasing the size of the federal budget nearly 50 percent since 2000. (Inflation over that same period averaged just 3 percent annually.)

If Congress keeps spending more than the government takes in, the deficit will remain a club for Democrats to use on Bush's economic policies.

But without those policies - the tax cuts, especially - the country would be looking at trillion-dollar deficits.

Bush's tax cuts have created new jobs, enhanced investment, rejuvenated the stock market and made people wealthier.

Good for him.

Very good for the country.

New York Post

[otterinbham 0]

Sorry Mike. I can't feel too triumphant about this. If Bush and Congress had not spent money like a pimp with a week to live (On social programs of all things...go figure), then the budget would be balanced even as we speak, with probably a largish surplus to boot. That would allow us to lower the tax rate even further, and really put the economy on a strong footing.

So I can't be a BushBot on this.

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Sorry Mike. I can't feel too triumphant about this. If Bush and Congress had not spent money like a pimp with a week to live (On social programs of all things...go figure), then the budget would be balanced even as we speak, with probably a largish surplus to boot. That would allow us to lower the tax rate even further, and really put the economy on a strong footing.

So I can't be a BushBot on this.

I understand and agree. But any time the deficit is shrinking, it is good news. No matter who, R or D, is in office. It is up to us to notify our representatives and keep the heat on them. W also should have learned early what a veto pen is for.

[otterinbham 0]

"W also should have learned early what a veto pen is for."

Amen to that. At the same time, I think his Prescription program will prove ruinous. It was wholly unnecessary, added an entirely new layer of bureaucracy to the government, and will amount to a staggering cost over the next couple of generations.

For someone who claims conservative credentials, he sure did a botch job of keeping the government's growth in check.

However, on the flip side, I would offer that--as a percentage of the GDP--the Federal deficit is at the lowest level it's been since 1996, and it was accomplished without the massive tax increases of the early Clinton era. So I'll be willing to give the devil his due.

[CCTAU 3,351]

Bush was voted in a conservative hard-ass and has turned into a true fiscal liberal. Only thing that distinguishes him form a dim is abortion and gay marriage. If the dims were bright (hehe), they would realize this and claim him as one of their own from a fiscal standpoint. He tried to be all things to all people instead of being the bastage that I voted for.

As for national security, he got a big dose "oh $hit" when 9/11 hit. I still wonder how things would have progressed without 9/11. I'm not sure Bush nor congress was prepared to function under these conditions. Some say it was done before. But not really like this. Trying to run a war, that is very much needed, and keep the economy flowing has proved too much for both Bush and congress. But I would rather fight back than sit around and wait for the next attack.

I'm still pissed that republicans did not ramrod their conservative programs through while they had the chance. Biggest problem is that they have no strong leadership anymore. Had Newt stayed on, this would not be happening.

Sad part is, that as bad as the repubs are, the dims are even worse. No true visionaries on either side. Pelosi? Puleeeeease. Only thing she is looking forward to doing is taxing the "rich." Only problem is, many of us are falling into that classification every year. And I don't feel rich. I'm sure when she and her "no idea" cronies are through with me, I'll feel even worse.

But at this point, I am glad that the economy is doing well. And that has to be attributed to Bush paying close attention to it, cause congress sure hasn't.