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| Home Front: Economy |
| Psst, the Deficit's Shrinking |
| 2005-01-19 |
| The U.S. Budget Deficit Is Shrinking Rapidly This week's [Jan. 13, 2005] Treasury report on the nation's finances for December shows a year-to-date fiscal 2005 deficit that is already $11 billion less than last year's. In the first three months of the fiscal year that began last October, cash outlays by the federal government increased by 6.1 percent while tax collections grew by 10.5 percent. When more money comes in than goes out, the deficit shrinks. At this pace, the 2005 deficit is on track to drop to $355 billion from $413 billion in fiscal year 2004. As a fraction of projected gross domestic product, the new-year deficit will descend to 2.9 percent compared with last year's deficit share of 3.6 percent. Wire reports are loaded these days with accounts of an expanded trade gap (driven mostly by slower exports to stagnant European and Japanese economies, along with higher oil imports from the peak in energy prices). But there's not a single report I can find that mentions the sizable narrowing in U.S. fiscal accounts. Behind this really big budget story is the even-bigger story: The explosion in tax revenues has been prompted by the tax-cut-led economic growth of the past eighteen months. With 50 percent cash-bonus expensing for the purchase of plant and equipment, productivity-driven corporate profits ranging around 20 percent have generated a 45 percent rise in business taxes. At lower income-tax rates, employment gains of roughly 2.5 million are throwing off more than 6 percent in payroll-tax receipts. Personal tax revenues are rising at a near 9 percent pace. Meanwhile, in the wake of strong stock market advances over the last two years, non-withheld revenues from individuals — including investor dividends and capital gains that are now taxed at only 15 percent — have jumped by over 14 percent.snip According to the Washington Post, the Bush budget totals planned for fiscal year 2006 may be essentially unchanged from the totals for fiscal year 2005 (excluding defense and homeland security). ...the administration's first really tough budget request (due out next month) "would freeze most spending on agriculture, veterans and science, slash or eliminate dozens of federal programs, and force more costs, from Medicaid to housing, onto state and local governments." The rapid growth of federal health care and other entitlements would also be slowed markedly. snip. This includes, by the way, Bush's plan to reduce Social Security benefits by replacing wage indexing with a price-level formula and extending the retirement age — one or the other, or both — in return for personal saving accounts. By the way, Treasury Secretary John Snow just completed a Wall Street tour where leading bond traders told him not to sweat the transitional costs for personal accounts. The traders said that an additional $100 billion a year over the next decade for transitional financing will be easily manageable. "A rounding error," one senior trader told Snow. snip — Larry Kudlow, NRO's Economics Editor, is host with Jim Cramer of CNBC's Kudlow & Cramer and author of the daily web blog, Kudlow's Money Politic$. |
| Posted by:trailing wife |
| #2 ...but Common Sense News has learned that the first word is generally agreed to be either "Keynes" or "Krugman". Besides one being dead, how can you tell the difference? |
| Posted by: Raj 2005-01-19 10:28:55 AM |
| #1 In other news today, authorities announced the bizarre discovery that several hundred Americans have mysteriously died from what can only be described as terminal constipation. The victims were geographically scattered, but the pattern seemed centered upon large East Coast cities. Another shocking aspect is that all of the victims appear to be economists or former economists currently on book and lecture tours or writing for newspapers. Common Sense News has learned that, at least in several cases, the victims had left crude messages scrawled in excrement - apparently with their fingers. There are conflicting accounts, as no journalists have been allowed to examine the evidence, but the message was remarkably similar in all known such cases. It appears that the victim wrote "[unintelligible] is an flaming asshole.", a wryly macabre phrase, under the circumstances. Law Enforcement who have witnessed the scenes are in dispute, but Common Sense News has learned that the first word is generally agreed to be either "Keynes" or "Krugman". Developing. |
| Posted by: .com 2005-01-19 9:16:37 AM |