Jan 12 2007
Deficits Still Falling
The old adage “if it ain’t broke, don’t fix it” should be a warning to Democrats intent on their socialistic tax and spend policies. The US economy is doing just great (thanks George Bush!), the job market is looking as good as the stock market, and the Federal deficit is dropping. In fact, the Feds ran a bit of a surplus in December:
he federal deficit has improved significantly in the first three months of the new budget year, helped by a continued surge in tax revenues.
In its monthly budget report, the Treasury Department said Friday that the deficit from October through December totaled $80.4 billion, the smallest imbalance for the first three months of a budget year since The budget year ends Sept. 30.
Tax collections are running 8.2 percent higher than a year ago while government spending is up by just 0.7 percent from a year ago. Last year’s spending totals were boosted by significant payments to help the victims of the Gulf Coast hurricanes.
The Treasury said for December, the government actually ran a surplus of $44.5 billion, the largest surplus ever recorded in December and a gain that reflected a big jump in quarterly corporate tax payments.
The $80.4 billion deficit for the first three months of the current budget year was down 32.6 percent from the imbalance for the same period a year ago of $119.4 billion.
For the year, analysts are still forecasting that the deficit will worsen from last year’s total of $248.2 billion, which had been the lowest in four years.
The Congressional Budget Office is forecasting that the deficit for the 2007 budget year will rise to $286 billion, an increase of 15.2 percent from last year, but that figure could be lowered when the CBO releases its revised estimate later this month.
People may wonder why the CBO continues to forecast increasing deficits – as they have for the last 4 years running. That’s because (a) their forecasting models don’t work and (2) they are always misforecasting the true budget picture. For all the money we spend on government you would think the CBO could get some real models in there that actually reflect the return on investment from tax cuts and the ensuing economic power lower taxes create. But the CBO is a political institution (don’t kid yourselves otherwise) and they are firm believers in their religion of liberal tax and spend policies.
All eatablished government agencies are highly socialistic because of the type of employees who shun the dynamics of the private market for the safety net of government careers. It really is that simple, and why the agencies refuse to think in terms of the private sector (which works and employs the nation as well as the bureacrats). The Deficits will be lower this year too.
AJ,
I played with the numbers from October/November and mapped them to previous years and trends and came up with more accurate estimates than the CBO. Predicted here.
It really is not all that difficult.
Without a city falling into the ocean or a massive terrorist attack we are looking at a $65 Billion dollar deficit for FY2007.
Folks who use the CBO numbers always come up looking like a$$… I think this chap might be honest, but most Libs cannot survive the facts.
But the Democrats will make the deficits go back up with their tax hikes, student loans, and minimum wage increase, Medicare reform.
I don’t think Pres Bush is gonna approve the dem spending without offsets. Expect the econ to get even better, the tax cuts and increased revenues is kicking in more each month.
I can just hear the Libs hollering for more taxes when the government is starting to run a surplus.
They better get their tax hikes in quickly.
I cannot imagine making the argument that taxes must be increased to increase the annual surplus.
By the way, only about 2% of the workforce was paid minimum wage – when you limit it to folks who are heads of household. That is, no kiddies or hobby jobbers…
The libs are getting desperate in many areas. That is probably why the retoric is getting so nasty. They thought since they were the majority in both houses they would run things.
They realize they cannot stop this war. The defense budget is in place until November 2007. The war will be won and Bush will get credit for bringing peace to the ME. They are just throwing red meat to their liberal base.
They have done their best to keep the news about the great economy under wraps and now it is coming out. Bush will get credit for this with his tax cuts which the dems fought tooth and nail. It would be funny if it were not so pathetic that the dems never learn about tax cuts. Every time they are implemented the economy soars. And everytime the dems tax us more the economy plummets. Economists they are not and never have been.
They have tried their best to downply the prescription drug bill and want to put a spanner in the works by having Medicare negotiate with the drug companies….nevermind that is against the law. This plan is working. Drug costs are coming down. Wallmart is even offering generic drugs for $4 for a monthy prescription. But then the dems hate Wallmart.
And now they want to give the non-proliferation program to the UN. How can they give an executive program to anyone. They don’t own it in the first place. This act alone should show the voters how wrong they were to put these people in power.
I am looking to see if they try to blackmail the president by saying we will not try to impeach you if you do as we say. I believe they would catch cold with that one. Bush is not a man to knuckle under any kind of pressure.
Barbara, I am making an extra effort to shop at Wal-Mart more than ever…I detest unions…
“The libs are getting desperate in many areas. That is probably why the retoric is getting so nasty.”
There is probably a whole lot of truth there. They can not argue on the substance of what the Republicans propose so they attack the individuals. The name calling is so childish and the lack of any class or decorum so glaring that I fail to see how people vote for them. Senate hearings look more like tryouts for Jerry Springer or The View. Try this: every time you hear them use the word “chickenhawk” substitute the word “poopiehead” and you will see what I mean. It is basically elementary school playground debate tactics using different words.
Will the Left cut my tongue out if I say “supply side?”
Heh, yeah … I remember when the press got all bothered about the phrase “tickle down economics” … but anyone with any actual education in economics knows that “trickle down” is how economics works. It was the entire point behind FDR’s New Deal, for example. If you paid people for building public works, those dollars “trickled down” to other people for goods and services which then “trickled down” to other people for thing things they buy … etc. All economics is “trickle down” from the person who has the money to the person to has a product.
And .. .since economics is basically always a supply/demand equation … you can do things in one of two ways. You can either give people more money so they can buy more stuff (demand-side) or you can make it cheaper to produce goods (supply-side). The effect is initially the same … people are able to buy more stuff which stimulates the economy. The problem with demand-side economics is that it leads to inflation. If you just give people more money, they just bid up the price of goods and services and you are right back where you started. In supply-side, if you create conditions where businesses can compete by lowering prices (by reducing taxes on them, for example) everyone benefits without inflation.
The old adage “if it ain’t broke, don’t fix itâ€
isn’t having any deficit being broke? i mean, a deficit is when our country is spending more money that it receives, and borrows the difference. the fact that the difference between incomes and outcomes is getting smaller does not mean that there’s no problem. the problem is still that the federal government is still spending much more money than it actually has, thus sending this country deeper and deeper into debt.
it’s like if your household earned $1000 a month and for decades was spending $1200 per month. then one day, you realize that for the previous few months you’re income has gone up to $1100 and your spending has only increased to $1250. your monthly deficit has fallen from a $200 shortfall to a $150 shortfall. sure, you can call that progress, but it would be stupid to claim that the problem has gone away. you’re still deeply in debt and your debt is growing. you’re not making any progress in paying it off and it’s only a matter of time before emilio esteves shows up and starts repossessing your stuff.
so yes, by any measure this country is still “broke” when it comes to the deficit. our debt continues to grow and continues to be financed by what amounts to the good will of the chinese government (which now holds a growing percentage of american debt). if this keeps up we are putting the ability to take down the american economy into the hands of a foreign government. i don’t know about you, but personally i think that’s a major problem.
Deficits….hmmm…
In the business cycle we have:
Accounts receivable “deficits”
Equipment “deficits”
Mortgage “deficits”
Property Improvement “deficits”
that’s true. and if a business were running the kind of deficits this country has since bush became president, we’d be in chapter 7 by now
Tell me, the deficit is what percentage of GDP?
And that is historically?
You are so wrong. If corporations had the INCOME that this government had, they would rule the world!
Oh, and one more thing:
What percent of the debt is paid to Americans through Treasury bonds,bills and notes? You know, mom and pops who rely on these for income?
Do war expenses increase the deficit?
And speaking of spending…
tell me again, why my SSI payments have not enjoyed COMPOUNDING OF INTEREST? You know, the ones, that if they had earned the average of 6%/year would have *doubled* every 12 years? (this investing ability is what the President is trying to implement into the program today-but the dems say nooooo)…
Tell me, the deficit is what percentage of GDP?
And that is historically?
i don’t know off the top of my head. and i’m guessing you could google it up just as easily as i could. so be my guest…
What percent of the debt is paid to Americans through Treasury bonds,bills and notes? You know, mom and pops who rely on these for income?
again, google away.
but i do know this: t-bonds are not just held by mom and pops. the reason china holds so much of the u.s. debt is because they have become the biggest holder of american bonds. all they have to do is cash them all in and the u.s. economy falls.
Do war expenses increase the deficit?
in theory it should. except that the bush administration has not included war spending in the normal budgetary process. instead of having it be part of the DoD budget for the year, the iraq and afghan wars are being funding by ad hoc “emergency” spending bills.
which is why some figures touting a falling deficit can be misleading. they sometimes only look at the usual budget and do not count the large and growing heap of money that is being spent on iraq and afghanistan.
tell me again, why my SSI payments have not enjoyed COMPOUNDING OF INTEREST? You know, the ones, that if they had earned the average of 6%/year would have *doubled* every 12 years? (this investing ability is what the President is trying to implement into the program today-but the dems say nooooo)…
SSI was not part of bush’s social security private accounts plan. SSI is not part of the “regular” social security system (which is why it is called “supplemental security income.” SSI benefits are not based on a persons work experience like SS retirement benefits are. SSI instead is essentially a federally run welfare system for the disabled. it’s just administered by the social security administration.
just to be clear though, the SSDI program (social security disability insurance) is part of the social security retirement system. SSDI does depend on the amount the recipient paid into the system while working and is essentially just a way to get retirement benefits early if you’re unable to work. many SSI recipients also qualify for SSDI and get both at the same time. but they don’t always realize it and sometimes just refer to their benefits generally as “SSI”
upyer?
quoting you: “but i do know this: t-bonds are not just held by mom and pops. the reason china holds so much of the u.s. debt is because they have become the biggest holder of american bonds. all they have to do is cash them all in and the u.s. economy falls.”
But not nearly as far and fast as China’s would. It would be complete suicide for them.
Because if the money’s not there to pay them, we would have the goods, they would have worthless paper.
Think China is planning to commit suicide? Useless, meaningless argument. Remember 10–15 years ago when Japan was in the same position? Japan crashed then, US didn’t.
Upyer, one more thing. It would help if you took a basic econ course. Let’s just play with some numbers a little bit.
Suppose your income is $30,000 annually this year.
Most people will spend most of that, so let’s say outgo is $30,000, are you broke?
So in that year, you buy and finance a house, the house cost’s 100.000 and your payments are $500 a month. So now your income is $30,000, you spent 100,000 for the house, but your total outgo is $30,000. Are you broke?
So next year you buy a car for $40,000, payments are $600 a month So you spent your usual amount plus $40,000 for the car and now your total outgo is $30,000. Are you broke?
You said above:”isn’t having any deficit being broke? i mean, a deficit is when our country is spending more money that it receives, and borrows the difference.”
By this statement, in all the situations above, you would have to say you are broke.
Now, you don’t buy anymore, but next year your income goes to $40,000 and your wife gets a job for $30,000 but you don’t buy any major items this year. Income now $70,000 but now you save $5000 a year. So income 70000, outgo 65000 still owe more than 100000, are you broke?
next year you get a windfall, your income shoots up to 200,000 and your wife makes 40,000 and you pay off the car and house and have 2000 left over, are you broke?
When in any of the cases were you actually broke and when were you just properly managing your financial situation.
Thankfully we have a Pres who is doing an excellent job of managing the US financial situation. Why would you want to change that?
Who do you know personally that has never financed a car or house with the anticipation of paying it off with future income? It’s the American way.
I was referring to MY payments into the “system”.
Just *ONE* payment of $4000.00 grows to apprx. $256,000 over 42 years at the average market return of 10%. That does not include matching funds from my employer! (Currently, you get a return of about ONE PERCENT on that $4000.00. )
Each of us would have had MILLIONS at age 62, the end of our working career, if the pay-ins had been INVESTED. We could have passed it on to our heirs also. It is CRIMINAL negligence, imho, what the government has done with MY MONEY. Criminal. Any corporation today would be prosecuted for FALSE ADVERTISING if they had done what the government has done. ..pretending to ‘TAKE CARE’ of my retirement. Hah! And the liberal dems would have been screaming for the corporations head. Such intellectual dishonesty again by those who hang onto the old Soc. Sec. system!
THAT is what I am talking about and that is indeed what the President wants in the social securtity reitrement system. WE ALL should want that!
And where do you get your information regarding the amount of bonds China holds? Americans hold a huge bulk of bonds, tbills and notes…just depends on interest rates as to which is the biggest investment at any given time.
And for the record, the highest % of debt was under Truman at 121%.
And I guess, we survived that and actually figured out how to borrow and repay over time…LOWER TAXES. The deficit is being cut as we speak. So sorry your DNC talking points won’t work with me.
And get rid of the 25% WASTE.. we inherited from democrats over the 40 years they controlled the purse strings.