The budget deficit will be slightly smaller than expected:
For the first time since President Bush took office, an unexpected leap in tax revenue is about to shrink the federal budget deficit this year, by nearly $100 billion.
A Jump in Corporate PaymentsOn Wednesday, White House officials plan to announce that the deficit for the 2005 fiscal year, which ends in September, will be far smaller than the $427 billion they estimated in February.
Mr. Bush plans to hail the improvement at a cabinet meeting and to cite it as validation of his argument that tax cuts would stimulate the economy and ultimately help pay for themselves.
Based on revenue and spending data through June, the budget deficit for the first nine months of the fiscal year was $251 billion, $76 billion lower than the $327 billion gap recorded at the corresponding point a year earlier.
The Congressional Budget Office estimated last week that the deficit for the full fiscal year, which reached $412 billion in 2004, could be “significantly less than $350 billion, perhaps below $325 billion.”
Of course there are tsome on the left who are claiming the previous deficit projections were artificially high (or that this is a giant PONZI scheme), making this drop inevitable. I would just like to point out that one might say that being excited about our nation only hemmorhaging $300 billion a year as opposed to $400 billion could possibly qualify as succumbing to the “SOFT BIGOTRY OF LOW EXPECTATIONS.” [/snark]
Stormy70
Slightly smaller? If it had gone up by $100 billion, it would have grown by gargantuan proportions. Come on, it’s a damn good sign for our economy. Oh, sorry, Bush’s economy.
Stormy70
25% is not slight, by the way.
ppgaz
Yes, it is slight, Stormy.
A year’s deficit is not “The Debt.”
The Debt is going on 8 TRILLION DOLLARS.
National Debt
Jesus H Christ in a handbasket. Are you serious with your comments?
norbizness
It’s a standard apologist line of defense: we’re running a gigantic deficit with no end in sight, but it’s only 75% as big as the worst year we ever had. SUCCESS! FISCAL RESPONSIBILITY!
ppgaz
Yes, my favorite line from the Liar in Chief is “we’ve reduced the deficit this year.”
Technically correct, but a grossly misleading — and deliberately misleading — statement.
So we have added 300 or so instead of 400 or so billion to the UNIMAGINABLE MOUNTAIN OF DEBT that is being propped up by foreign investors mainly because its in their interests to see us not go bankrupt right now …. we’re buying all their goods (see: Huge Trade Imbalance), you see.
Great job, George. Thanks so much. Very, very expert people who understand these things tell us that we are headed directly toward being Argentina in the not too distant future. We are crippling our grandchildrens’ future. But don’t worry, our rich friends are getting their big tax breaks. They know what’s best.
Lying bastards.
Aaron
Usually it’s smarter to view debt numbers as percentage of GDP – ours is a lot lower than other countries.
If people were serious about cutting the deficits, they’d be talking about SS reform…who’s talking about that and who’s saying there is no problem?
Also, I’d be interested to see a year by year analysis of Clinoton’s deficits. I believe only one year was actually in surplus.
As opposed to personal finance, governments should save when times are good and spend when times are bad…though politicians just tend to spend all the time.
Nikki
????
I would imagine that if people were serious about cutting the deficit, they’d be talking about cutting spending and raising taxes. You know, to get the dough to pay off those debts.
ppgaz
Wrong, Aaron. SS is not going to push the country over a cliff. Medicare and its ugly cousins will. Healthcare costs create a true looming crisis. What’s happening to GM is just a drop in the bucket compared to what can happen on a national scale.
Left alone, with proper use of the trust fund, and with an economy that doesn’t tank, SS will require adjustment down the road, but it will neither collapse, nor drag the country into a ditch.
Irresponsible fiscal policy, looking away from the healthcare monster, cutting taxes and spending a billion dollars every three days on a war … those are the kinds of things that will bring crisis.
Reasonable people might disagree on how to proceed. But no reasonable person can look at President Potatohead saying “we’re reducing the deficit” and think that he is anything but a lying SOB.
Vladi G
Umm, when their “reform” adds a mountain of debt to the already staggering total, I’m not sure it’s helpful for your side to bring that up.
Steve
SS reform is something like $2-5 trillion in new spending. That’s not going to help the deficit much.
John’s “Ponzi scheme” link is worth a read. Short version: about $61 billion of the “increased tax revenue” this year is attributable not to the mystical healing powers of the Bush tax cuts, but to the expiration of a particular corporate tax deduction. Now that the deduction isn’t available any more, those corporations suddenly have to pay more taxes, hence the increased revenue.
The reason it’s a “Ponzi scheme” is that this isn’t even increased revenue at all; it’s just something that the company formerly would have been allowed to pay over a period of years. So in exchange for this “increased tax revenue” this year, we’ll have the exact same amount in “decreased tax revenue” over the next several years.
p.lukasiak
is the $100 billion in the deficit reduction before or after all of the supplemental appropriations for the Iraq war?
(Actually, i guess it really doesn’t matter, because we aren’t talking about “deficit reduction” but “higher than anticipated revenues”, which regardless of the size of the deficit, are always a good thing.)
SeesthroughIt
That’s really the scariest thing. Knocking $100 billion of a deficit of $8 trillion? A step in the right direction, but a total baby step. Somebody needs to walk into a Bush budget meeting and deliver a much-needed Winston Wolf line: “Let’s not start sucking each other’s ****s just yet.”
But considering that economists on both the left and the right (including the right-wing’s favorite economic quote machine, the Heritage Foundation) agree that we’re on the road to a budget disaster of epic proportions:
The real kicker?
Holy crap–even the Heritage Foundation realizes that with the mess we’re in now, raising taxes is a necessary component of righting the ship. Still feel like rallying behind those tax cuts for the rich? Or has the Heritage Foundation officially turned in its conservative credentials by being a bunch of damned dirty realists?
Zifnab
Call me crazy, but wasn’t there some year back in… oh… the 90s when we weren’t deficit spending? I seem to remember a big stink coming from the Republican Party about those damn Democrats and how they hemoraged cash all the time and how we needed to clean that up. Which resulted in taking a serious look at programs across the board getting reevaluted. I think I even remember a time back in the election of ’00 when two Presidential candidates were arguing over how to spend all the money this country had.
And with a little bipartisan love and care, I even remember hearing something about being $40 billion in the black concerning Social Security.
But culling $100 billion of a projected $400 billion deficit. Yeah, I guess that’s good.
scs
A little trivia to add to the scintilating philosphy on here. Some one here basically blamed the national debt on Bush, a quick search found this about the national debt.
toptips.com/debt_history.htm
Date ______________ Amount
09/30/2003_______$6,783,231,062,743.62
09/30/2002_______ 6,228,235,965,597.16
09/28/2001_______ 5,807,463,412,200.06
09/30/2000_______ 5,674,178,209,886.86
09/30/1999_______ 5,656,270,901,615.43
09/30/1998_______ 5,526,193,008,897.62
09/30/1997_______ 5,413,146,011,397.34
09/30/1996_______ 5,224,810,939,135.73
09/29/1995_______ 4,973,982,900,709.39
09/30/1994_______ 4,692,749,910,013.32
09/30/1993_______ 4,411,488,883,139.38
09/30/1992_______ 4,064,620,655,521.66
Don’t forget- the economy grows at a somewhat steady pace too, so a larger deficit may remain at somewhat the same percent of the economy. Anyway, for those who blame “lying” George for our debt- it went on way before him and will go on way after him. The next step would be to find the percent of GNP the debt is- haven’t seen that yet.
Zifnab
Check your numbers, SCS.
A $400 billion deficit in ’92-’93 became a $200 billion deficit in ’96-’97 and then a $20 billion deficit in ’99-’00. But then the first year in office, it jumps back to $200 billion ’00-’01 and then $550 billion in ’02-’03.
Clinton? Bush?
Which Presidential Debt do you like better?
Zifnab
Check your numbers, SCS.
A $400 billion deficit in ’92-’93 became a $200 billion deficit in ’96-’97 and then a $20 billion deficit in ’99-’00. But then the first year in office, it jumps back to $200 billion ’00-’01 and then $550 billion in ’02-’03.
Clinton? Bush?
Which Presidential Debt do you like better?
Dave Ruddell
In Canada we’ve managed to run a surplus for the last several years. Of course, this has been accomplished by Finance Ministers essentially lying in their budgets by estimating revenues too low and expenditures too high, then being “Shocked, shocked’ that there’s money left over. Since there
scs
By the way, even if you all have a rudimentary knowledge of accounting, you should understand that to be debt free is not the best way to maximize your resources. The best way to do that is to have a balanced mix between assets and liabilities.
You should invest, or spend, a small portion of your assets to get greater growth for the future. For instance, you could have a 3% return on your $10,000 savings sitting in the bank, or you could take on a debt of $90,000 to get a loan for a $100,000 rental property that pays you 12% return in rent and equity. In the end you will be richer if you have the debt.
The trick is not to veer too much into the debt side where you take on too much risk and also too invest wisely. The same prinicples apply to countries as well. Do we really want a national debt of 0%?
scs
I make no claim to the figure’s accuracy – thats just what I found in the web site listed. Feel free to provide another website.
Birkel
ppgaz,
Please explain why the size of the debt in dollar terms is important, as opposed to, say, debt/GDP.
Now, please go hysterical by claiming that the US has the largest debt in the world and is therefore the worst economy in the world -OR- admit that more than just the dollar denominated debt matters (e.g. GDP).
arkabee
i’m not a libertarian. However, i can see where (to a certain extent) that view comes from. Taxes are bad, etc.
Ok.
That being said, there ARE taxes, currently, today.
And there ARE governmental expenditures, today.
I accept that there are those who think both those figures should be (to my perspective) lowered as to approach ZERO.
I would hope that one could agree to disagree in regards to that, because Tax and Expenditure numbers are NOT approaching zero.
Some think they should, some think they shouldn’t. Disagreement. OK.
REGARDLESS,
As someone who thinks there SHOULD be taxes, and that the government should perform certain services paid for by those taxes, I understand that when someone who disagrees with my position on this is elected (local, state, federal, whatever) that they will enact decisions and changes to move towards their view and away from mine.
OK.
That being said, i am not getting new programs, nor changes that i wish to be made to existing programs.
i was under the assumption, that the counter to that would be reduction of spending.
If i think everyone should have T-Bones,
and i am told “it is not fiscally responsible to get T-Bones for everyone, take the money you would use for T-Bones and give it back”
and then the speaker goes and buys Nikes for everyone,
can you understand my cognitive dissonance?
—
On a seperate topic:
can someone explain to me how, in 2005, the Social Security System is introducing either Federal Deficit or Federal Debt?
Please do not try to convince me that Social Security is “bad” as a way of answering. Feel free to try and convince me it _is_ bad, that’s a seperate topic, ok. But whether it is “bad” or “good” has no bearing as to my question. I am asking from a financial “books” stand point.
i was under the impression that any “insolvency” from the SS system was to occur in the furtue,
and further under the impression that money that would ordinarily be self-contained within the SS Syetem is actually floating out in the general Federal System.
arkabee
i’m not a libertarian. However, i can see where (to a certain extent) that view comes from. Taxes are bad, etc.
Ok.
That being said, there ARE taxes, currently, today.
And there ARE governmental expenditures, today.
I accept that there are those who think both those figures should be (to my perspective) lowered as to approach ZERO.
I would hope that one could agree to disagree in regards to that, because Tax and Expenditure numbers are NOT approaching zero.
Some think they should, some think they shouldn’t. Disagreement. OK.
REGARDLESS,
As someone who thinks there SHOULD be taxes, and that the government should perform certain services paid for by those taxes, I understand that when someone who disagrees with my position on this is elected (local, state, federal, whatever) that they will enact decisions and changes to move towards their view and away from mine.
OK.
That being said, i am not getting new programs, nor changes that i wish to be made to existing programs.
i was under the assumption, that the counter to that would be reduction of spending.
If i think everyone should have T-Bones,
and i am told “it is not fiscally responsible to get T-Bones for everyone, take the money you would use for T-Bones and give it back”
and then the speaker goes and buys Nikes for everyone,
can you understand my cognitive dissonance?
—
On a seperate topic:
can someone explain to me how, in 2005, the Social Security System is introducing either Federal Deficit or Federal Debt?
Please do not try to convince me that Social Security is “bad” as a way of answering. Feel free to try and convince me it _is_ bad, that’s a seperate topic, ok. But whether it is “bad” or “good” has no bearing as to my question. I am asking from a financial “books” stand point.
i was under the impression that any “insolvency” from the SS system was to occur in the furtue,
and further under the impression that money that would ordinarily be self-contained within the SS Syetem is actually floating out in the general Federal System.
scs
Zifnab – I think you may be confusing the national debt with the annual budget deficit. I’d have to look it up, but I’m pretty sure the national debt never went down to $20 billion.
ppgaz
Uh, your’re right, Birkel. The fact that we are building a mountain of debt now at about $8 trillion and climbing … means nothing. Nothing at all. Nothing to worry about. Why, I can’t imagine why we even bother to keep track of it at all, really.
What matters is that a lying sack of shit president can cough up some misleading stat during a photo op, and play the public for fools. Yeah, THAT’s what’s important.
What was I thinking?
GFY.
scs
ppgaz wrote –
Yes, my favorite line from the Liar in Chief is “we’ve reduced the deficit this year.”Technically correct, but a grossly misleading — and deliberately misleading — statement.So we have added 300 or so instead of 400 or so billion to the UNIMAGINABLE MOUNTAIN OF DEBT … Great job, George.
You still don’t know the definition of a lie there, or what a misleading statement is either. There is nothing grossly misleading about what Bush said.
As you can see from the chart that I posted, the national debt has been growing for years, since WWII I think. The annual deficit has increased and decreased somewhat depending on taxes and the strength of the economy, but never really changing the debt trend signifigantly. For that to happen, you would need to sustain a trend for many years, and that hasn’t happened yet.
What Bush meant was that the deficit is projected in advance every year (or every quarter, I’m not sure which) based on a trend from last year. The deficit was projected and expected to be more than it was – hence he reduced the DEFICIT. Why then should Bush be expected to make a statement about reducing the DEBT which has a trend that has not really changed that much in 50 years? Just because he didn’t mention the obvious, doesn’t mean he is being misleading. You’re just not logical.
Sojourner
He hasn’t reduced the debt. It continues to grow. He simply reduced the amount by which it will grow this year.
scs
Correction – I just saw on the site brillig.com/debt_clock/faq.html that the debt has been growing at a pretty flat rate since WWII and then at a pretty constant steep rate since 1980.
ppgaz
Heh. Where is Dr. Pangloss, when you need him?
Of course there is.
“We are reducing the deficit”, as I said, is technically correct.
“We are adding a little less to the mountain of debt this year than we did last” is honest, and fully correct.
He’s the president. Saying a technically correct but misleading thing is not acceptable.
To you, it is. To me, it’s not.
By the seemingly bottomless pit of standards by which the GOP operates, I guess the half-complete version is good enough.
I answer to a higher authority than the White House talking points brigade does, apparently.
Kimmitt
The CBO’s numbers have been less and less reliable of late; I’ll believe their projections once the numbers are in.
The Disenfranchised Voter
It is not just the left, I’m a libertarian who thinks they purposely made the projection high.
You act as if misleading isn’t a common tactic of this Administration.
I don’t know how fiscal conservatives can actually support this President. The Administration’s fiscal policy is outrageous.
scs
Well ppgaz, I’ve got bad news for you. Ain’t no president ever going to phrase it that way. But – a poster can dream, can’t he (or she)?
Birkel
ppgaz,
Good job answering a most basic question.
I suppose in your world GE’s debt in absolute terms is a terrible thing. After all it’s so big.
And my credit card debt is no problem whatever given how small it is relative to GE’s debt.
Whew!
I’m glad you solved that one for me.
/snarking at the maroon