Deficit Drops, Revenues Up, Just In Time For Congress To Blow It
This probably won't get much attention in the media today, but new budget numbers show that George Bush's sunny deficit predictions were off the mark. It turns out that revenues are better and the deficit is smaller than predicted, and will likely balance much more quickly. That is, it would have until the Democrats decided to reverse the tax cuts that fueled the increased revenues:
The federal deficit so far this budget year is running sharply lower, driven by record revenues pouring into government coffers.The Treasury Department reported on Friday that the government produced a deficit of $157.3 billion for the budget year that began last Oct. 1. That's a substantial improvement from the red ink figure of $239.6 billion produced for the corresponding 10-month period last year. ...
The White House predicts that the deficit this year drop to $205 billion.
But the nonpartisan Congressional Budget Office predicts the government will produce even less red ink this year. It recently said the deficit will be "toward the lower end" of a $150 billion to $200 billion range.
The deficit would be even smaller than that, and it should be, given the record $2.12 trillion in tax revenues collected this year. However, we also set a record for spending, at $2.27 trillion. Thanks to the new Congress, we'll be spending even more next year, even adjusted for inflation -- and if the Democrats capture the White House, it may go even higher.
Revenues continue to rise dramatically -- and ahead of expectations -- because of the tax cuts that have fueled steady growth for four years. As the economy grows, so does revenue to the federal government. It comes from better income tax revenues as more jobs get created, federal excise taxes, corporate taxes, capital gains, and any number of other sources. The tax increases on which the Democrats based their budget projections will take capital out of the markets and cost jobs -- and the revenue will fall off, creating bigger deficits to go with their increased spending.
So where does the Washington Post place this great economic news? On the front page? Perhaps just a link on their main web page? Nope. If you didn't catch the RSS feed from their national news, you won't find this article easily on the Post's site, at least not at 10:50 am CT. You won't find it on the New York Times' front page, either, nor on the Chicago Tribune's main web page, either.
Gee ... wasn't the ballooning deficit a major issue in the last couple of elections?
Posted by Ed Morrissey on August 11, 2007 10:37 AM | Comments (15) | TrackBacks (4)
Comments (15)
Posted by GarandFan | August 11, 2007 10:59 AM
You forget my dear Captain, according to the MSM the economy has been in the toilet for the last several years. The MSM said so.
Posted by dhunter | August 11, 2007 1:10 PM
WOW ,those Democrate Tax increases sure work fast ,helping lower the deficit before they are in effect . Kind of like Bill Clintoon making his tax increases he wasn't going to give us retroactive to the first of the year when he took office . Maybe W. should issue an executive order making elections retroactive to 2004. Sure would save us a lot of Money. By the way send your dollars to DC for bridge repair hoping to get ,oh, maybe .25 back. Sheets Bryd needs some more things named after him.
Posted by Rose | August 11, 2007 1:55 PM
Gee, Capt., our President is meaner than anyone in the DIM Party imagined, dismantling far far more of the Dim policy than they EVER dreamed he could do in such a short period of time --- remember Hillary shrieking about all he had undone, a few months into the beginning of his first administration - she didn't give specifics, but it ws immediately after she found out about all those Treaties he undid - including the World Heritage Treaty.
SO LOL!!!
Posted by FedUp | August 11, 2007 1:56 PM
ARRRRRRRRRGGGGGGGGGGGGGGHHH!
There must be SOME bad news that the Dimmicrats can glom onto to counteract the good news...??? Never mind... they'll find a way to screw it up!
Posted by jaeger51 | August 11, 2007 2:52 PM
Yet again you see the MSM at work...the average person thinks we are running up a huge deficit and it is because Bush gave all the money to the rich people. The average person thinks the Dems will tax the rich and they will end up with more money. What will happen is the govt will end up with more money, which they will proceed to waste, and the economy will tank, and the average person will see their wage go down because the rich people will feel threatened and cut their costs. But the MSM will not report any of this and it will take another Carter economic disaster for the public to wake up and vote them out of office again.
Posted by THomas mcfadden | August 11, 2007 3:17 PM
The MSM is the greatest threat to both the economy and our freedom. If a Dem were in the White House with these stats, they'd be screaming "Happy Days Are Here Again." I encourage all Republicans to contribute the continuing Media decline by cancelling your newspapers today. Until we put these folks out of business, nothing will change.
Posted by Fight4TheRight | August 11, 2007 4:34 PM
I'm having trouble finding anyone I know that actually STILL watches the MSM or physically picks up a hard copy of the MSM !
I think the only subscribers actually left to the New York Times are Rosie O'Donnell, Cindy Sheehan and Chris Matthews.
Posted by CoRev | August 11, 2007 4:39 PM
Ed and others, Steve over at the Skeptical Optimist post a nice chart monthly.
http://www.optimist123.com/optimist/2007/08/deficit-watch-t.html
For a while there it looked like we were gong to balance the budget in 08, but now it appears to be later in 09. What are the Dems going to do about the raised taxes after trhe budget is balanced? WE ALL KNOW SPEND EVERY CENT THEY COLLECT. THERE ARE JUST SO MANY THINGS THAT WERE LEFT WANTING BY THAT OLD REPUB ADMINISTRATION.
Sheesh!
Posted by swabjockey05 | August 11, 2007 7:53 PM
Fight for the right.
If nobody pays attention to them...does that mean the MSM had no influence on the last election cycle?
Posted by Kurt Brouwer | August 11, 2007 10:33 PM
I agree with CoRev that the Skeptical Optimist has excellent material on the deficit, economic growth, government debt and more.
I covered this topic on our blog as well. This deficit at 1.5% or less of GDP is well below the 45 year average, which is 2.2%
Posted by docjim505 | August 11, 2007 10:37 PM
jaeger51 hits the ball out of the park. The dems (with plenty of help from GOP porkers) will rape us some more under the guise of "making the rich pay their fair share" and "it's for the children!"
F***! Doesn't ANYBODY remember the '70s???
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| August 12, 2007 5:45 AM
Do these #s take into account for the cost of the war?
Posted by Jon | August 12, 2007 7:01 AM
Not to take anything away from tax cuts, I like them as much as the next guy, but a large factor that’s been driving our economy and the tax revenues collected from it has been access to cheap easy money. The housing bubble and the unraveling of the sub prime lending market have the potential to offset any projected gains. Remember the boom of the nineties and the trillion dollar projected surplus for the first decade of the new millennium didn’t fizzle because of tax increases. The ‘New Economy’ tanked because in large part it was made up of hot air; when bad, in some cases criminal, business practices started coming to light the boom went bust and the surplus went with it.
Posted by docjim505 | August 12, 2007 7:28 AM
Jon,
An excellent point. I think low tax rates are good for maintaining economic growth, but I think you're right in that they are not the sole driving force behind our good economy.
Posted by CoRev | August 12, 2007 7:43 AM
TyCaptains, Yes. The numbers are the difference between monthly revenue and expenditures. Simple math.
Jon, I believe much of the tech bubble was driven by the 100s of Billions spent on Y2K fixes, new S/W new H/W in the inventories all around the world. Good for US econ where much of it was produced. After Y2K other factors could over ride what would be a 3-5 year hiatus on computer upgrades.
DocJim505, Roger on that!