A President that is OUT OF TOUCH!

Published on July 11, 2006 By COL Gene In Politics

Today Bush is running around holding a news conference to brag about the new estimate that shows the Annual Budget deficit for FY 2006 will be per the president ONLY $300 Billion down from an earlier estimate of $425 Billion. Who would boast about an economic policy that during this so called boom is producing a $300 Billion dollar deficit in ONE year?

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. HE COOKS THE BOOKS by reducing the actual deficit by the $200 Billion surplus from these two unrelated funds. The earlier budget deficit for 2006 was actually $625 Billion and is now down to $500 Billion. The actual deficit in 2005 was $625 Billion not the $425 Billion Bush reported.

Anyone that could run around bragging about adding Â½ a Trillion dollars this year to the National Debt shows how our president is OUT OF TOUCH! That is NOT an accomplishment but a DISGRACE.

If Bush needed a quadruple Bypass surgery, his solution would be to fix one of the four blocked arteries and then claim he was healthy! He truly made himself look pathetic by the statements he made today about running a $500 Billion annual deficit! If he had BALANCED the budget the way it was when he took office and had begun repaying the debt HE ADDED, then the president would have a reason to brag.

Comments (Page 3)

COL Gene

on Jul 12, 2006

What is not a good idea is continually adding to the debt. We are in the third year of what Bush calls an economic recovery and we are $500 Billion in the RED. This is the same BS that Reagan tried in the 1980's and what Bush 41 called Voodoo Economics. The proof is that we had a balanced budget when Bush took over and EVERY YEAR he has been in office we have run the largest annual deficits in our history! We need the added revenue from returning the tax rates on the top 5% to the pre 2000 levels along with a cut in ALL pork barrel spending and stricter enforcement of our tax laws.

The economy was never better then during the 1990's when the tax rates were higher!

stutefish

on Jul 12, 2006

Bush is on track to CUT THE DEFICIT IN HALF.

THIS YEAR.

How is that "continually adding to the debt"?

At the end of the 90s, that economy collapsed. Maybe because the taxes were so high? (Also because of the dot-com boom, which doesn't really count as a "good economy", since it wasn't based in real value and obviously wasn't sustainable.)

After the dot-com bubble burst, and 9/11 happened, the economy tanked, which is exactly what you'd expect. Now sources both inside the government and outside the government are agreed that 1) the economy is recovering nicely and 2) its recovery is due in part to tax cuts.

In summary: during the 1990s, we were enjoying the tail end of the economic growth initiated under Reagan and fueled by a recent surge in telecommunications technology and commercial applications. We were also on the verge of an economic collapse, on account of rising tax rates, over-valuation of that technological surge, and an imminent and devastating terrorist attack. After the collapse, the government took some steps to recover the economy, including tax cuts. Since then, the economy has been recovering steadily, partly due to the tax cuts.

What you're demanding is that we bring back the economic collapse of the late 90s, by increasing the tax rate again. Do you also want a ludicrous stock bubble and a major terrorist attack, to ensure a complete return to the glory days of the 1990s?

Bah.

It's all beside the point, anyway. If you were truly a conservative, and truly concerned about the deficit, you'd shut your gob about tax hikes and spend all your time ranting at the legislators who actually write the budget.

COL Gene

on Jul 12, 2006

Stutefish

If Bush cuts the annual deficit in half by the end of his term we will still be running a deficit of $250 Billion per year and will have $10Trillion total debt from all the years that we did not balance the budget. The annual deficit each year cumulates and that is how we went from a Total National debt of less the $1 Trillion in 1980 to $10 Trillion by the time Bush goes back to Texas! How has that solved the problem? We have to pay the interest and repay the $10 Trillion dollars and we are still adding to the debt even if Bush does cut the annual deficit in half. He is not talking about cutting the national debt in half but just cutting the annual debt we add to the total in half!

Island Dog

on Jul 12, 2006

If higher taxes are needed to BALANCE the Budget then that is what must be done!!!

Fine col. As long as tax increases are for everyone, not just one class.

COL Gene

on Jul 13, 2006

Editorial from the Philadelphia Inquirer 13 July 2006: Posted on Thu, Jul. 13, 2006
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Editorial | A Smaller Deficit
Worth a Bronx cheer

Score one for President Bush, but his budget team is still way behind.

The president said Tuesday that the federal deficit for the fiscal year ending Sept. 30 would be only $296 billion. That is good news; last year's deficit was $318 billion. And the Bush administration, never shy about managing expectations, had projected in February that this year's deficit would be a whopping $423 billion.

So a less catastrophic deficit is indeed a ray of sunshine.

But, in this week of the All-Star Game, Robert Bixby, executive director of the nonpartisan fiscal watchdog group Concord Coalition, put the news in perspective with a baseball analogy:

Suppose your team is trailing by eight runs. Then your side scores one run. That is good news. But you are still far behind, and opportunities to erase that deficit are dwindling.

Worse, it's as if Manager Bush glanced at the scoreboard, saw his team trailing 10-3 and pronounced that his pitching staff was doing great. No need to change strategy.

"We're not looking at tax and spending policies in a rational way," said Bixby.

The lower deficit is due in part to an increase in taxes paid by corporations, wealthy individuals and small business owners. It's another bit of evidence that, in this economy, high wage earners are benefitting at a greater pace, with bonuses and bigger salary hikes, than their lower-paid counterparts.

The wealthy are getting wealthier and opening a larger gap on the rest of America.

The president and supporters of his tax cuts claim that the latest revenue uptick proves that tax cuts "pay for themselves" by boosting the economy. It's wishful thinking, this absolutist version of "supply side" theory.

Without doubt, tax cuts can spur economic activity that generates revenue to offset the impact of tax cuts. While this "replacement effect" can vary, it's never 100 percent and rarely more than 50 percent.

The Bush tax cuts are a big reason the government is still operating at a large defict. The red ink is projected to get worse next year.

Fact is, economic growth since the tax cuts in 2001 hasn't been as strong as the growth in the economy in the years following the large Clinton-era income tax increase in 1993. For three consecutive years after the 2001 cuts, tax revenue declined. While revenue has increased over the past year, tax receipts are only now recovering to where they were in 2000.

A lot of factors go into the economy's health, many beyond government's control. What recent history suggests is that supply-siders overestimate the economic benefits of tax cuts, while trying to excuse or minimize the damage they do to the nation's fiscal health.

The last thing the nation should do is look at this budgetary blip and conclude that it justifies extending tax cuts that are set to expire.

"We still have a $300 billion deficit," Bixby said. "We're still not raising enough money to pay for the war, prescription drugs and all else."

We're still down seven runs, and it's getting late in the game.

COL Gene

on Jul 13, 2006

IslandDog

The MOST important issue is balancing the budget and repaying the National Debt. That WILL NOT happen if we continue to follow the tax and spending policies of GWB and the GOP in Congress!

Island Dog

on Jul 13, 2006

The MOST important issue is balancing the budget and repaying the National Debt. That WILL NOT happen if we continue to follow the tax and spending policies of GWB and the GOP in Congress!

The MOST important issue is waging a war against islamists who are trying to kill us. A job democrats will not do. As I said, raise taxes all you want, as long as it's a tax on everybody.

Island Dog

on Jul 13, 2006

Since you want to post editorials.

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.

COL Gene

on Jul 13, 2006

I used this information in my Blog. Please explain why Bush subtracts the Social Security and Medicare Surplus from the numbers? Those two trust funds have NOTHING to do with the annual budget. The only thing that does is make the deficit appear smaller i.e. $300 Billion rather then $500 Billion. Either number is unacceptable as it is piled on top of the $8.5 Trillion that exists today. Any president that would think what he announced was good is OUT OF TOUCH!

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