The real problem is the Federal budget deficit, not so much the states, with the exception of some, like California. The Federal deficit is structural, and there doesn't seem to be any sign that politicians from either party will grow a backbone soon and tackle entitlements. (I should really say that there is no sign that voters will grow backbones and elelct politicians who will tackle entitlements).

Ignoring the problem will just allow it to grow bigger. The debt is like an elephant in the living room that noone will acknowledge.

Everyone acknowledges it, and we have since the early 1800s when modern states started running the, They don't matter.

Add TN to the mix, check out billhobbs.com.

Surplus even more than is being reported.

corp tax rev up $30-40 b now, could be $100 b by EOY. Deficit even lower than we thought.

Robert,

True, but there is no loss in making a big issue of all of these turn arounds at the local level. First, the emphasize the importance of economic growth in government revenue generation; and second, it should help put an end to the all the talk of tax hikes we hear at state levels, and may be allow some states to cut taxes.

As to the structural federal deficits, I tend to agree with you. Ironically, gridlock -- as specualted in a previous post -- is 100% the opposite of what one needs to address these. Clearly never an all Dem government would address this, and not a first-term all Rep government. What the Japan Times article (elsewhere) could have pointed out is that a second-term, "don't care if you dislike me" Bush Adminstration may have the best chance of all these combos to get somethig done. Not a certainty, but best chance.

Agree with the above. Saw recently the improving economy will reduce the federal deficit by about $100BN. Making the connection between growth and increased revenues is important and if people believe it at the state level they should believe it at the federal level. And while small deficits don't matter every effort should be made to reduce government spending (which would help with further tax cuts and simplification of the tax code)

AWW:

It'll be way more than a $100 billion improvement--they routinely whiff on those numbers.

So, the deficit goes up by about $300 billion, and the expectation that it will go down by $100 billion is seen as good news? OJ, they generally whiff on the optimistic side.

MG, I am hoping that your scenario for the Bush 2nd term is correct, but I am afraid that too many people really do believe, as OJ, that debts don't matter. I've never witnessed such a disregard for economic reality as we are seeing today, and sadly it is the Republicans that are handing out the "new economy" koolaid that folks like OJ are drinking.

Robert, my little valetudiniarian:

they generally whiff on the opposite side of what it's doing--right now it's headed back to balance, unfortunately.

Ehrlich will get credit for holding the line on the budget and taxes, while Busch, the (Democratic, obviously) Speaker of the House, will get roasted for having proposed a billion dollar tax increase just six weeks ago. If they can get Democratic former Governor and current Comptroller Schaefer (and biggest Ehrlich booster) on board, Bush will win Maryland. Especially because the year-end surplus will very possibly be more than $200 million above the estimates (2% or more of general fund revenues).

And, as noted, Virginia is looking for revenues to exceed the estimates by 2.5% or more, which does not include any impact from the massive tax increase (what were the Rs thinking? Especially since the signs have been there about revenues for some months...).

And NJ currently has $700 million more than estimates (GF revenues of about $22 - $24 billion, I believe).

And Delaware...and North Carolina...

Income tax withholding in VA and MD and NC and DE (and likely NJ) is 8% or more for the fiscal year, very strongly implying employment statistics are missing something (and possibly will be revised upwards).

Sure looks good.

Robert:

The Federal gov't will be running deficits from now until most of the Boomers are dead.

As oj notes, it won't much matter.
For one thing, relative to the rest of the developed world, the US is in pretty good shape with regards to demographic trends, gov't budget deficits, and national debt.

Nice site. Keep up the good work. Bryian

Nice site. Keep up the good work. Bryian