U.S. budget deficit improves

[sabra]

http://www.baltimoresun.com/business/bal-deficit0815,1,2163766.story?coll=bal-business-headlines

U.S. budget deficit improves
New estimates show red ink for current fiscal year will fall to $331 billion

The Associated Press

WASHINGTON -- The federal budget-deficit picture turned brighter today as congressional scorekeepers released new estimates showing the level of red ink for the current fiscal year would drop to $331 billion.

The new report by the nonpartisan Congressional Budget Office, which does budget analysis for lawmakers in Washington, gave the latest proof that surging revenues and a steadily growing economy are combining to bring the deficit down from a record $412 billion posted last year. CBO predicts a $314 billion deficit for the budget year starting Oct. 1.

The report is welcome news for President Bush, who has seen the budget situation during his tenure deteriorate markedly from predictions of unending surpluses when he took office in January 2001.

....

If the tax cuts are renewed, the deficit picture would worsen by $204 billion in 2011 -- to perhaps $327 billion or so. By 2015, the cost of extending the 2001 and subsequent tax cuts would reach $432 billion.

[booksenkatz]

1. The pisser is, this deficit didn't have to happen in the first place. nt

[NewJeffCT]

2. Krugman talked about this before

The Bush White House uses intentionally out of whack numbers in the Spring when they estimate the deficit. And, then when the actual numbers come in later in the year, it makes it seem almost good by comparison.

[Freddie Stubbs]

11. Exactly

The numbers should be compared to what the deficit actually was last year. That would be a much better indicator. Is it going up? Down?

[KingFlorez]

3. It doesn't really matter

The GOP will just run it up again with the tax cuts for the rich and corporate giveaways.

[jody]

4. Good news, we predict the U.S. is dying at a slower rate? n/t

[punpirate]

5. How much above that $331 billion...

... has been hidden by borrowing against the SS trust fund? The real deficit is still likely over $500 billion.

And where did this surge of revenues come from? Total employment is still at or slightly below early 2001 levels. Wages against inflation are virtually flat. Total corporate taxation is at an all-time low. Tax cuts for the very wealthy have reduced taxation on their traditional sources of income.

Definitely a puzzlement.

[punpirate]

18. Silly me...

... I forgot my own answer to my own question when this "surge in revenues" was mentioned in the previous quarter. This is from corporations cashing in their offshore profits and taking the small charges for taxes paid (5-7%), in exchange for the big windfalls which can be converted into mergers and takeovers, according the so-called jobs bill signed around February.

This increase in revenue is going to be very, very temporary, since there was a time limit on the tax amnesty. Once the time period runs out, that's when the job losses from further corporate consolidation will begin, and the revenues go in the toilet--again.

[Triana]

6. When Clinton was Pres...

...we didn't HAVE red ink. I hardly consider a tiny bit LESS red ink any improvement. What a bunch of hooey.

[Roland99]

12. Only for the last two fiscal years

But, think about the costs of the * tax cuts.


In the prosperous 1990s (during the dot-com boom), taxes were higher and people were still making money hand-over-fist. It just turned out that a lot of it was speculative by VCs in these dot-com companies and they started losing their asses which led to layoffs, firings, etc. That, in turn, led to increased white-collar unemployment (or underemployment as they found lesser paying jobs) which in turn led to decreased spending and you get the point from there.


BUT, the taxes were NOT a hindrance. Spending was being reduced.


Now, spending is UP and taxes are DOWN and the deficit has ballooned. Hell, the Iraq war costs alone are half of the fiscal deficit.


What President in the past cut taxes and boosted spending when going to war?

[central scrutinizer]

7. bizarro-world definition of "improved"

A deficit can "improve" only if it gets smaller. Would your credit card bill balance "improve" if it was only $331 more than last month, instead of the $412 more you feared? The press lives in a world of low expectations - get out the shovels, we have to lower the bar some more and it is already way below ground level.

[FloridaPat]

8. This does not include the money for all the invasions.

The are "off the books" so the government can come out with crap like this.

[tanyev]

9. I predict that I will eat an entire banana cream pie tonight.

If I actually eat only half the pie, may I delude myself that I have made great strides in improving my diet?

[Massacure]

10. $331 billion to much

[firefox]

13. It is a number offset by the SS surplus

Boomers of 1946 will be 62 in 2008. The SS will start going down in a hurry. And in January, the great Medicare reform of 2003 opens up the federal treasury to the health care industry. Oil rising bucks the feel good feeling of this "downward number". The country is in a downward spiral.

[Up2Late]

14. I wonder how much of this so called "improvement" are the result of...

...the higher amount of Federal Gasoline Taxes?

These are the same people who didn't see any problem with the way ENRON did their accounting. :banghead: :mad:

[bunkerbuster1]

19. Gas taxes don't increase with higher gas prices.

It's not a percentage, but rather a flat 18.4 cents per gallon.

http://en.wikipedia.org/wiki/Gasoline_tax

If anything, you'd think that higher gas prices might hurt that revenue stream a bit, since some people (shock! horror!) might actually drive a little less.

[xxqqqzme]

15. well that's so much better

ONLY 331 billion! We can all breathe easier now.

'...The projection for the deficit at the end of the current budget year on Sept. 30 remains far worse than when Bush took office. At that time, both White House and congressional forecasters projected cumulative surpluses of $5.6 trillion over the subsequent decade....'


a question on the 331 billion - does that include the costs of blivets**' wars or not?

[The_Casual_Observer]

16. This is some kind of projection or estimate based on nothing

I'll bet that it actually comes in at 500 billion.

[ticapnews]

17. Here are some better numbers...

National debt (as of 8/12) $7,882,473,618,136.70
Increase since 1/20/01 (1665 days) $2,154,696,879,832.06
Percent increase 37.62

Increase under Bill Clinton (8 years) $1,539,684,631,121.04
Percent increase 36.76

Increase under Bush I (4 years) $1,330,661,146,996.28
Percent increase 46.57

Increase under Reagan (8 years) $1,927,220,960,187.32
Percent increase 207.18

In the last four years of Clinton's presidency we had a surplus of $558Bln, when you add in the raiding of the Social Security Trust Fund. Excluding the Social Security money (on-budget) we had a surplus in both 1999 and 2000 totaling a modest $88.5Bln. The last time there was a surplus was 1960 when we had a $510Mln surplus.

For those people who believe the evil liberals are out to steal all their money and give it to the poor and the homeless:

Under President Clinton, annual spending grew $315Bln, an increase of 27.5%.
In the first four years under President Bush spending has already increased by over $454Bln, an increase of 31%.

Between 1993 and 2001 the government spent $12.7Trln. So far (through FY2004) in the Bush years we have spent $8.3Trln. Based on OMB estimates, we will spend $21.7Trln between 2001 and 2009.

Oh, and the national debt will be around $11.5Trln by then.
That's $11,425,614,948,417.40 give or take a few hundred billion...

This is taken from a spreadsheet available from the OMB here: http://www.whitehouse.gov/omb/budget/fy2006/hist.html

[LeftyElvis]

20. The deficit is such BS

Who cares what the "deficit" is; it's all about the national debt; in the trillions. There was never any surplus; hell if you owe trillions how can there ever be a surplus? It's like saying "I owe 3 million dollars but look; I have $200 in my checking account. Granted, bush has made it much worse worse but the bottom line is that the US is bankrupt and will be for the forseeable future.

[TahitiNut]

21. A deficit INCREASES the national debt; a surplus DECREASES it.

Notice how the national debt came down during the Clinton/Gore administration? There WAS a surplus, you see.

[LeftyElvis]

22. No doubt

That Clinton/Gore were excellent stewards of managing the economy but as I recall very few called for taking that surplus and paying off some debt.

[MGKrebs]

23. Just a bizarre article.

Here's some quotes from the cnn version
http://www.cnn.com/2005/POLITICS/08/15/budget.deficit.ap/index.html

"...gave the latest proof that surging revenues and a steadily growing economy are combining to bring the deficit down from a record $412 billion"

You would think this means that things are looking up. That we MADE $100 billion this year, but really, the story should be that we went over budget by $314 billion this year. Period. We are still over budget. The deficit is still increasing.

"...confirms the dramatic improvement in the 2005 deficit picture that the administration reported last month," said Scott Milburn a spokesman for the White House budget office"
$300 billion over budget is dramatic improvement? Wow, talk about low standards.

"The White House foresees a $333 billion deficit for the year that's about to end and a $341 billion deficit for next year."
Is that going to be "dramatic progress" too?

Oh, and by the way...

"CBO assumes that Bush's tax cuts are allowed to lapse at the end of the decade...Even if the tax cuts were allowed to expire, the budget would still stay in the red through the full 10 years covered by CBO's report.

If the {White House supported}tax cuts are renewed, the deficit picture would worsen by $204 billion in 2011 -- to perhaps $327 billion or so. By 2015, the cost of extending the 2001 and subsequent tax cuts would reach $432 billion."

So how are the tax cuts helping again?