Bush Touts Lower Budget Deficit Figures

[mad1]

"Additional revenue generated from groups that pay their taxes quarterly — primarily corporations, small businesses and the wealthy — dropped the projected federal deficit for the 2006 budget year to $296 billion, a $127 billion decrease from a February estimate, Bush said.

Together, these tax cuts left nearly $1.1 trillion in the hands of American workers and families and small-business owners. And they used this money to help fuel an economic resurgence that's now in its 18th straight quarter of growth," he said."

fox

[Theophylact]

"Touts" is right:

Quote:

Deficit's Good News Less Than Meets the Eye

by Joel Havemann, Times Staff Writer
July 11, 2006

WASHINGTON — When President Bush releases the traditional midsummer update on the budget today, he is expected to announce that federal revenue has soared above predicted levels and that the deficit is headed for a welcome decline from earlier estimates — as much as 30%, or $125 billion, below the level projected just five months ago.

And the president will likely attribute the windfall to his tax cuts, which the administration says are stimulating economic activity and generating the torrent of tax revenue.

But the apparent good news will not strike some economists as surprising: This will be the third year in a row that the administration put forth relatively gloomy deficit forecasts early on, only to announce months later that things had turned out better than expected. To some skeptics, it's beginning to look like an economic version of the old "expectations" game.

Even economists who hesitate to accuse the White House of playing games say the claims of good news on the budget are unfortunate because they make people unjustifiably sanguine about the government's current fiscal health.

And the focus on this year's budget will distract attention from the real budget crisis, which will begin in two years as the eldest of the baby boom generation become eligible for Social Security benefits.

"Our problem is our large long-term deficit, and the sooner we deal with that the better," said Comptroller General David M. Walker.

Walker, who is head of Congress' Government Accountability Office, warned of "a false sense of security. We're in much worse shape fiscally today than we were a few years ago."

To divert attention from that continuing reality, critics suggest, the administration has borrowed a gambit favored by political candidates, who commonly try to lower expectations about how they will fare to magnify the apparent size of their victory if they win.

In the case of the budget, they say, the administration has begun to low-ball its revenue estimates at the beginning of a budget cycle to set up good news a few months later.

"The White House would have signaled that it was serious about the budget if it had decided not to spin the numbers," Stanley Collender, a budget specialist with Qorvis Communications, wrote for National Journal. "The fact that it is choosing to do so points out directly that, in spite of what appears to be good numbers, nothing much will have changed."

[MTAtech]

Wow, are they desperate for good news or what. In the beginning of the year, the Admin inflated the deficit projection to $423 billion, so now they can seem like heros. The 2006 number is $296 billion. The 2006 number is $296 billion. The 2005 deficit was $319 billion. So, the $423 billion number is irrelevant. As the article said, Bush's original budget released in 2001, predicted a $305 billion surplus for the current year to sell its policy of never-ending tax cuts.



From today’s NYT Editorial:

Quote:

…the revenue surge is neither a sign that the tax cuts are working nor of sustainable economic growth. A growing number of economists, most prominently from the Congressional Budget Office, point out that upsurges in revenue are also the result of growing income inequality in the United States, an observation that is consistent with mounting evidence of a rapidly widening gap between the rich and everyone else. As corporations and high- income Americans claim ever more of the economic pie, revenues rise, even if there’s no increase in overall economic growth.

[Patrick]

No post.

[cyphen]

This just in...

... 100 million peacetime deaths later, Marxist Socialists shut eyes and plug ears, ignore cause and effect, and sing the same old tune of their disproven philosophy...

... Marxist Socialists still want income redistribution, somehow thinking this will solve all of society's ills...

... Marxist Socialists haven't abandoned deadly philosophies, just shouting them more loudly...

... Marxist Socialists ... better than ever at coalescing the American left...

... Marxist Socialists picking up where they left off in the 60s...

... Marxist Socialists ... still hating capitalism ... still clinging to utopian nightmare....

... Marxist Socialists ... "This time, we'll get it right! Promise!"

[Theophylact]

Hey, JP, welcome back!

Oh, sorry, my mistake...

[MTAtech]

Quote:

Originally Posted by Patrick

Just curious. Who was closer? The Republicans with what they thought the tax
cut would generate or the Democrats with what they thought the tax cuts would
lose?

The tax cuts didn't generate any revenues. They are a net loser.

Quote:

The IRS data are for tax year 2003, the year in which the Jobs and Growth Tax Relief Reconciliation Act took effect. That legislation enacted tax breaks for capital gains and dividends, as well as reductions in marginal tax rates and other tax cuts. Based on a detailed analysis of individual tax returns for 2003, the IRS concludes, “Because of this law [JGTRRA], even with [an] increase in taxable income, the lower tax rates resulted in a 6.1-percent decrease in total income tax [relative to the previous year].” http://www.cbpp.org/10-6-05bud3.htm

[mad1]

Quote:

Originally Posted by MTAtech

Wow, are they desperate for good news or what. In the beginning of the year, the Admin inflated the deficit projection to $423 billion, so now they can seem like heros. The 2006 number is $296 billion. The 2006 number is $296 billion. The 2005 deficit was $319 billion. So, the $423 billion number is irrelevant. As the article said, Bush's original budget released in 2001, predicted a $305 billion surplus for the current year to sell its policy of never-ending tax cuts.



From today’s NYT Editorial:

"The 2005 deficit was $319 billion" and the "2006 number is $296 billion", that is a decrease of 23 billion. The deficit projection is meaningless, what matters is the real numbers. This shows that Bush's policies are working to reduce the deficit, the numbers do not lie.I understand that you have difficulty accepting this, but the results are there.

[johnnycombat]

It is really sad when spending $296 billion more than you make can be spun as good news. If the US was a company and we were shareholders we would be very mad. O wait I am mad. When you start paying back some of the $8 trillion we owe then you have something to tout.

http://www.toptips.com/debtclock.html

[cyphen]

Quote:

Originally Posted by Theophylact

Hey, JP, welcome back!

Oh, sorry, my mistake...

Ain't my fault these rags print stuff that sounds like it comes from the Communist Manifesto...

And there are plenty of people out there screaming "tax the rich more" "down with corporate capitalism" and the like. And hey - ain't like marxism is dead. Woefully. One almost won in Mexico, i hear. There's The Nation, Mother Jones, everything written by Howard Zinn. Then there's the World Workers Party. The president of Venezuela. Hollywood. The list goes on!

This particular rant is just about the insinuation...

Let me ask you something, Theo... Actually, it's a two-part question:
1) What was the determined purpose of radicals in the 60s?
2) What happened to those radicals?

The accusations made then are the same as they are now. It's all the same old tune... "Down with the bourgeois order..."

MTA - dunno how you can claim that the tax cuts didn't generate revenues. To say that is to defy the nature of capitalist economy. I know the idea that lowering taxes can actually result in increased tax revenues spins the liberal mind into oblivion - but look at it from this angle... it's akin to product pricing. If the product's price is too high, less people buy it. The profit margin is higher, but the receipts are low. Lowering the price of the product - reducing its profit margin - increases sales. The profit margin is lower, but overall receipts are much higher.

Taxes are to the economy what a dam or a water wheel is to a river. Too much taxation slows the economy. The economy thrives the faster it moves, or the more transactions there are. If people are taxed more (ie the water wheel is much much bigger) people spend less, and the economy slows. Businesses are less likely to start up, and are more likely to close. As a result, jobs are lost rather than created. Raises are less likely when the economy slows.