Not what it used to be, Forbes writes:
Budget Deficit Drops to $250 Billion
The federal budget deficit estimate for the fiscal year just completed has dropped to $250 billion, congressional estimators said Friday, as the economy continued to fuel impressive tax revenues.
The Congressional Budget Office’s latest estimate is $10 billion below CBO predictions issued in August and well below a July White House prediction of $296 billion.
The improving deficit picture - Bush predicted a $423 billion deficit in his February budget - has been driven by better-than-expected tax receipts, especially from corporate profits, CBO said.
The 2005 deficit registered $318 billion; the record $413 billion deficit was posted in 2004.
At $250 billion, it would be the lowest since the $158 billion figure in 2002, the first deficit following four years of surpluses.
The CBO estimate continues a positive trend on the deficit after a grim deficit performance during President Bush’s first term, and comes despite soaring war costs and $50 billion in emergency spending for hurricane relief. …
But when measured against the size of the economy, which is the comparison economists think is most important, the deficit picture looks even better.
At 1.9 percent of gross domestic product, the 2006 deficit registers far below those seen in the 1980s and early 1990s. The modern record of 6 percent of GDP came in 1983 and deficits greater than 4 percent in 1991 and 1992 drove Congress to embark on a 1993 deficit-cutting drive.
Still, the long-term deficit picture remains bleak due to the looming retirement of the Baby Boom generation, which threatens to swamp Social Security and the Medicare health care program for the elderly.
The CBO estimates reflect actual government revenues and expenditures through August and estimates for September. The Treasury and the White House budget office are expected to release official deficit numbers next week.
Tax receipts are up $253 billion, a whopping 12 percent over last year. That’s the thirds consecutive year of strong revenue growth after a dismal performance in the early part of the decade. Revenues dropped three years in a row after fiscal 2000 but picked up again in 2004.
Taxes paid quarterly on corporate profits and by wealthier people and small businessmen were especially strong in 2006. Corporate income taxes rose 27 percent over 2005 while nonwithheld receipts increased 19 percent.
The full article can be found here. Link via Back Talk, who has more here and here.
Such economic behavior is described by the terms “Laffer Curve”, or “Reaganomics”, and therefore must be an illusion. John Kenneth Galbraith and other great thinkers have told me there can be no such thing.
So excuse me if I choose to ignore or manipulate the data.
So, in summary…
The deficit is now not the most awful deficit Bush has produced. In fact, by Bush’s standards, its pretty good.
Wow. Whoopee.
Feel free to wake me up when Bush and this Congress balance the budget (like Clinton and Gingrich did) and we’ll all celebrate. Ok?
No, its alot brighter than that…Back Talk blog gives us some historical perspective:
God bless them tax cuts! More here.
Hmm…
True_Liberal smugly predicts that liberals “will choose to ignore or manipulate the data”. But no liberals take the bait.
Then HP quotes a conservative blogger who promptly proceeds to ignore and manipulate the data of the Clinton years.
Pot, meet Kettle.
HP,
Far be it for me to pooh-pooh good news (there’s precious little of it these days). Actually, I’m quite pleased to hear the deficit is not as god-awful bad as it has been in previous years. So don’t get me wrong. But isn’t it fair to describe this as a textbook case of meeting lowered expectations? It sure seems that way to me.
Gas, by the way is down to $2/gallon! And the stock market is reaching pre-Bush levels! If peace should break out I guess things will be nearly as nice as they were during the Clinton years. Is that the standard now? If so, party on!
LOL. I see your point, but Clinton years as an aside, I think having the budget deficit “well below the the average budget deficit over the last 30 years” is good news under any presidential era…factor in the stock bubble crash, 9/11 and others, and it becomes an almost economic miracle.
Btw, Back Talk is a self described liberal academic, not a conservative.