July 14, 2005

THANKS, GIPPER:

Deficit Down 22% in Latest Projection: The shrinking budget gap buoys tax-reduction advocates as Congress considers Bush's request for more cuts. (Warren Vieth and Richard Simon, July 14, 2005, LA Times)

White House budget officials said Wednesday that this year's federal deficit would be 22% smaller than expected, providing ammunition to supply-side advocates who contended that tax cuts helped pay for themselves.

The revised budget forecast by the White House Office of Management and Budget projected a deficit of $333 billion for the fiscal year ending in September, $94 billion less than the administration estimated five months ago.

The deficit is forecast to be 2.7% of gross domestic product, a broad measure of the nation's economy. That would be an improvement over last year's $412-billion shortfall, which was 3.6% of GDP. The record, 6%, was set in 1983 after then-President Reagan's big tax cuts


Of course, the Reagan deficit was the precursor to over twenty years of uninterrupted economic growth, while the Clinton/Gingrich surplus triggered Fed hikes, throwing the whole theory into a cocked hat.

Posted by Orrin Judd at July 14, 2005 12:00 AM
Comments

If the Democrats are pleased by this good fortune for the USA, why are they so reticent to speak of it?

Posted by: Genecis at July 14, 2005 10:30 AM
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