Beware of falling deficits
The Wall Street Journal wonders why soaring deficits always make the news while falling deficits don't.
That's easy! Because Bush is president.
The federal deficit is down by at least $100 billion because of (are you ready?) skyrocketing tax receipts -- up almost 15% through June.
But didn't Bush "recklessly" cut taxes for "the rich?" Say, do you suppose there might be something to this whole "supply side" thing after all?
While I'm on the subject, I think there's another important lesson to be learned here: long term deficit projections are bullshit. Not too many years ago, in the late 90's, economists were forecasting balanced budgets and surpluses "as far as the eye can see" -- ten and twenty years into the future. A few short years later, after an economic recession and the September 11 attacks, we had "exploding" deficits "as far as the eye can see."
The problem is the "eye" can't really see that far. Those predictions were bullshit in the 90's and they were bullshit in 2002. And the next time someone tries to predict federal budget deficits more than a year or so out? That will be bullshit as well. Let's try to remember that when it happens.
Comments
Larry Kudlow wrote nearly the same in a column for NRO earlier in the year. Deficit projections were down that day and he took that opportunity to shake his fist at the MSM for not reporting the good news. It's all because Bush is President, Larry told us. Then, just a week later, the projections changed and suddenly the deficit wasn't going down, it was going up but Larry Kudlow had moved on.
It is always fun to see all the right wing blogs shaking their fists at the evil MSM. You guys should try synchronized swimming as you've gotten quite good at it. Regarding today's news, it seems that Ben Bernanke was making his first speech as White House economic adviser. He had some good news which I hope holds up. I have to say the details are pretty sketchy, though.
Posted by: PE | July 12, 2005 05:14 PM
Wow that 7.8 trillion dollars in national debt is going to keep shrinking like a marshmallow in a vacuum... :)
Posted by: Godzilla | July 12, 2005 05:45 PM
Have you been hanging out with the Main Stream Media?
Posted by: PE | July 12, 2005 05:55 PM
:)
Posted by: Godzilla | July 12, 2005 08:39 PM
PE, want synchronized?
OK, how about 'quagmire', a word used to describe the Iraq war by, geez, how many 'original' Dems and MSM-types?
Want a newer one? Try googling the number of Dems who have called on Bush's SCOTUS nominee to be a 'uniter, not a divider'. I have heard over 5 different members of your party utilizing Bush's old phrase.
Or how about the one which Pelosi and others are using regarding a 'plan for victory' or some such. Can't recall the exact phrase as it is eminently forgetable, but it really is just rewording for an exit plan.
Carville must be pleased that so many still follow his words in lockstep.
In other words, this isn't your song to sing, my old friend.
Posted by: mal | July 12, 2005 11:05 PM
I have heard those words used, but I haven't used the words "quagmire" in reference to Iraq or Bush's promise to be a "uniter not a divider" in reference to Congress. In reference to the latter, I expected Bush to be a partisan. Most in politics are. In reference to the former, I find the "quagmire" label to be rather unspecific and I have far more often compared the situation the Americans face in Iraq to the Israeli experience brokering the many factions in Beirut rather than the American experience in Vietnam which is quite different in many key respects. (Besides, there isn't a lot of mud in Iraq.)
Both sides have their synchronization. If you want to say that the author of "Cynical Nation" has every right to be synchronized as Nancy Pelosi has on the other side.. well, fine.
Posted by: PE | July 13, 2005 09:46 AM
What is really funny (or sad) is because we had projections that said the budget would be balanced some liberals seems to think it was balanced under Clinton because the projections came out when Clinton was President.
Posted by: tracelan | July 14, 2005 12:31 AM
Tracelan..
If you check out the Congressional Budget Office Historical Budget Data Tables (www.cbo.gov), you will see that there were indeed small surpluses in the last years of the Clinton Presidency. If you included the Social Security surplus, the fist overall surplus was in 1998. If you separated Social Security outlays/revenue from the overall budget, the first surplus was in 1999. In 1999, the surpluses were $1.9 billion general and $124.7 billion for Social Security, rising to $86.3 and $151.8 in 2000. In 2001, the first year of the Bush tax cuts, the Social Security Surplus continued to rise to 163.0 but the non-SS budget went back into deficit. Bush's non-SS deficits have been -32.5 in '01, -317.5 in '02, -538.4 in '03 and -567.4 in '04. Clinton, meanwhile, inherited a 340 billion dollar deficit that had gone up 10 out of 12 years preceding his election. In Clinton's first year of office, the deficit went from $340 billion in 1992 to $300 billion to 1993 and then continued its reductions every year, going down both under a Democratic and a Republican congress, until it did reach a real (non-Social Security) surplus in his seventh year of office.
Hope those facts relieve you of your sadness.
Posted by: PE | July 14, 2005 05:13 PM