BACK INTO THE DANGER ZONE:

A tamed US deficit, but can it last?: At $205 billion, the 2007 deficit is expected to be half its '04 peak, as corporate tax revenues surge. (Peter Grier, 7/13/07, The Christian Science Monitor)

According to the Office of Management and Budget's annual mid-session review, the federal budget deficit is now predicted to come in at $205 billion for the fiscal year that ends this October.

That's $43 billion lower than last year's deficit and about half the recent peak of $413 billion, hit in 2004. In fact, it's $15 billion lower than OMB predictions of only five months ago.

It seems extraordinarily unlikely that the US can prop up the world economy if we're running such a nugatory deficit to go with the trivial national debt.

Posted by Orrin Judd at July 12, 2007 8:35 PM