Another useless post about Bush. Gloom and doom col, do you ever wonder why people like you don't get elected?

This week, the White House will revise its fiscal year 2006 budget deficit estimate to roughly $300 billion, a significant reduction from its January forecast of $423 billion. This will continue the White House's pattern of very conservative estimates. Our calculations suggest that the federal budget deficit this year will be approximately $260 billion. This is down from $318 billion in FY-05 and $413 billion in FY-04. Strong gains in tax receipts have overwhelmed increased federal spending. Congressional Budget Office (CBO) data show that federal tax receipts during the nine months ending in June were 12.8% above the same period in FY-05. Withheld income taxes increased 9% in June from last year; non-withheld income tax payments surged by 20%, while corporate tax receipts grew by 17%. If federal receipts continue to grow in a similar fashion during the final three months of this fiscal year, they will climb to an all-time high of $2.4 trillion dollars, $275 billion above last year, $400 billion more than in 2000, and equal to 18.5% of GDP. Federal spending is on track to increase 9% this year, and will end the year at 20.7% of GDP, up sharply from the 18.4% share in 2000. If federal spending had remained at 18.4% of GDP this year, the US would have recorded a small surplus of $21 billion. It has become popular to say that, "tax cuts do not pay for themselves." In fact, Henry Paulson, who will be sworn in today as the 74th US Treasury Secretary, was all but forced to say this in his confirmation hearing last month. The problem is that it is not clear whether this statement actually means anything. In a static world, tax cuts do not pay for themselves. But the world is not static. As Secretary Paulson said at his Congressional hearing, tax changes affect people's behavior. As a result, tax changes alter the course of the economy. To assume otherwise is naïve. Equally as important is the fact that different types of tax cuts impact the economy in different ways. In 2001, most reductions in marginal income tax rates were phased-in over many years. But, if people know that tax rates will be lower in future years they will push as much economic activity as they can into those lower tax years. This resulted in anemic economic growth (and declining tax revenue) during 2001, 2002 and early 2003 even though the Fed was cutting interest rates. The 2003 tax cut ended the phase-in, accelerated the tax cuts and reduced tax rates on qualified dividends and long-term capital gains. This caused an immediate acceleration in business investment and tax revenues surged. In fact, inflation-adjusted tax revenues have grown more than 10% annually over the past two years; a feat rarely accomplished in US economic history. As a share of GDP, tax receipts are still well below the 1998-2000 average of 20.3%. But those were abnormal years. Since 1930, there have only been 19 years in which the tax share of GDP was at or above 18.5%, and in the past 20 years, tax receipts have averaged 18.3% of GDP. This means tax receipts in 2006 will be above historical norms. Since the tax cut was passed in May 2003, US GDP has expanded by more than 20%, or roughly $2.2 trillion. To put this in perspective, we have added more to GDP in the past three years than an entire China (current estimate of $1.9 trillion in annual GDP). In the three years before the tax cut, GDP in the US grew just 10.4%. Most importantly, tax revenue trends suggest that government statistics are underestimating economic growth. People and companies do not pay taxes on income or profits they do not earn. There is no sign of a slowdown in the budget data.

Then when you look at the Bush numbers you see he has LIED about the deficit by subtracting the surpluses from Social Security and Medicare BEFORE he reports the numbers.

Politicians have been misreporting and fudging Social Security funds in order to prop up their budgets for decades now. Bush came up with it? Give me a break.

IslandDog

You post confirms what I said. Bush has lied about the size of the deficit by subtracting the $200 Billion in Social Security/Medicare Surplus and is running around claiming a $500 Billion deficit is an accomplishment. What is worse then having a useless President is having a President that is driving our country into fiscal trouble and people like you that defend such a policy.

Found what I was looking for... From Ethical Positions: Looting the Trust Funds, dated 1998.
"Off budget" expenditures are exempt from the normal controls in the congressional budget process. Revenues remain attached to the particular project being funded and cannot be redirected for other purposes. In FY 1997, more than $350 billion, or 22 percent of spending, was off budget.

One might believe that the hundreds of billions of dollars rolling in to the Federal government through excess Social Security contributions is being placed in a trust fund. It should be saved there for a time when it is needed. But, no! Instead, this money goes directly into the general fund and is counted as income to help balance the budget. In FY 1997 Social Security pulled in an excess of $81 Billion into the general fund. In FY 1998 it added $100 Billion to the general fund.

What's placed in the Social Security trust fund to replace the excess revenue collected? Nothing more than IOUs in the form of non-negotiable treasure bonds. Senator Earnest "Fritz" Hollings has indicated that "The truth is that the Social Security Trust Fund has already been stripped bare. There is no trust and no fund." Not only is the trust fund bare, but the liabilities of the Federal government grow larger as the amount of bonds in the fund increases.

So unless Bush was president in 1997/1998, this has been going on since well before GWB came into office.

If your beloved Clinton can do this same thing and you give him credit for balancing the budget, how come you can't accept this practice as a given when GWB does it too?

Singrdave

That does not alter the fact that by combining the SS and Medicare Surplus with the general Fund Bush is making the annual deficit appear $200 Billion per year smaller. This was not the problem it is today before we started running the large deficits since 2001. The point of this Blog is that Bush is telling everyone how great it is to only have a $500 Billion deficit rather then a $620 Billion deficit. What BS. If he had balanced the budget the way it was when he took office he would have done something good for this country. He and Reagan are the two most fiscally irresponsible Presidents’ in our 230 year history! Between them they added 90% of the National Debt to the books and we will be spending $400 Billion EVERY YEAR more in Interest on that added debt. That is about what we spend on national defense and the interest BUYS US NOTHING. It pays for the past when we spent more then we taxed and our children and grandchildren will pay for our stupidity!

Since 1980 we have paid $6.5 Trillion Dollars in interest on the national debt!

I think I read this article last August.

Who would boast about an economic policy that during this so called boom is producing a $300 Billion dollar deficit in ONE year?

I  guess it's about the same as the people who bragged about how Clinton "balanced the budget" or how a reduction in the growth of spending is a "cut"... or how about how pulling our troops out and leaving the people of Iraq to the bacteria isn't "surrendering", but an honorable act?

What's the difference between these things and today's news about the deficit?  The news about the deficit isn't a bold faced lie. 

 

We have NEVER had a president that was a fiscally irresponsible as Bush and Reagan. They are responsible for almost 8 Trillion Dollars of the National Debt. The interest we must pay each year will increase from about $100 Billion per year to $500 Billion EVERY year. Not Clinton, Carter, Bush 41 and anyone else except Bush 43 and Reagan have come even close to that result. We will be spending MORE on interest on the debt then we spend on National defense.

You could turn in your retirement check and help reduce the deficit.

You did not mention the higher rate of tax revenues. Wonder why?

I must be psychic, I knew who wrote this drivel before I clicked on it.

Let's see...

Bush promises to halve the deficit during his second term.

Financial analysts both inside and outside of the government agree that Bush is on track to halve the deficit as early as this year.

Bush cut tax rates.

Tax revenues are up.

Gene thinks all this is a terrible problem, somehow.

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I have to admit, the only one of those that didn't surprise me was the last one.

You total idiot. Reagen ushered in decades of prosperity and Bush has made a monkey and a liar out of you at every turn. What did Clinton do? Absolutely nothing, he merely partied for 8 years and claimed responsiblity for the benefits of his timing. Meanwhile he did nothing about terrorism or the fact that Hussein was getting rich, mocking the useless UN and shooting at our pilots while Clinton cowered in the corner with Monica Lewinsky. I have been reading you, off and on for 18 months now, only once or twice have I seen any of your BS occur.

Perhaps we should feel heartened at the prospect of spending more on the debt than on defense: less money for killing people and breaking things, and we'll still have enough left to buy guitars, built campfires and sign Kumbayah with the rest of the world.

Let's see, col hates Bush, hates Reagan, wants to raise taxes and run away from our enemies. Don't insult the rest of us by calling yourself a Republican ever again.