As we all know, a "deficit" is a measure of how much more broke we are now than we were before. I can't imagine bragging about how wonderful our economy is because "we aren't much more in debt than we already are"!
Our recent economy has been "good" because of the housing balloon - just as it was during the Clinton administration with the Internet balloon. When it burst we had a mild recession just about the time Bush became president. Nothing to do with him, of course.
Well, now the housing balloon is losing air and hopefully headed for a soft landing with only a mild recession next year or so.
However, I worry that our massive debt being carried by such nations as China along with the fact that we've been hemorrhaging wealth from our inability to make a buck in our international business dealings over the years.
It seems to me that if we continue to give our nation away to foreign interests, we're going to have to pay the piper sometime - and probably when we can least afford it - like during a recession.
After all, if someone owes you money and it looks like he may lose his job, you certainly want him to pay off his debt to you before he goes on welfare! And I don't think that China, et al, would take it kindly for us to get out the printing presses to make more paper money! It doesn't work that way.
If you listen to independent economists like Lou Dobbs, who are concerned about the gradual demise of the middle class in this country (you and I) rather than the prosperity of international business interests, you'll learn that you can't just follow party line - simply because neither party is interested in our class, but rather their own election and the special interests they represent.
Thus, the only voice the middle class has is by picking and choosing among those few politicians from any party who are actually running for the good of the nation and the great washed masses. For example:
Pick the guy, regardless of party who advocates a sizeable increase in the minimum wage.
Pick the guy who is opposed to "Free Trade" with other nations, but advocates negotiated trade (not isolationism) where the so called ‘playing field' is level, profitable and ecological - what you might call, "Win-win trade".
Pick the guy who advocates functional education of the masses rather than, for example, the education George Bush got which left him incompetent to run a company or a nation. We don't need any more MBA's, we need engineers, technicians and competent paramedics, nurses, etc.
Pick the guy who advocates something like the GI Bill for everyone. If you're old enough you remember that the GI Bill was how many, if not most of us were taught how to actually do something. And everyone knows we old geezers were the most successful generation in American history!
Pick the guy who wants us to make stuff again - rather than just sell cars, insurance or spend his life performing useless ‘administrative' tasks.
Federal deficit now lowest in 4 years
By MARTIN CRUTSINGER, AP Economics Writer
WASHINGTON - The federal budget deficit, helped by a gusher of tax revenues, fell to $247.7 billion in 2006, the smallest amount of red ink in four years.
The deficit for the budget year that ended Sept. 30 was 22.3 percent lower than the $318.7 billion imbalance for 2005, handing President Bush an economic bragging point as Republicans go into the final four weeks of a battle for control of Congress.
Bush called the 2006 outcome a "dramatic reduction" in the deficit which allowed him to fulfill his 2004 campaign pledge of cutting the deficit in half earlier than his original 2009 target date.
"These numbers show that we have now achieved our goal of cutting the federal deficit in half and we've done it three years ahead of schedule," Bush told reporters at a Rose Garden news conference. "The budget numbers are proof that pro-growth economic policies work."
The pledge to cut the deficit in half was based on the administration's forecast that the 2004 deficit would hit $521 billion, a figure that proved to be too pessimistic by more than $100 billion. However, the administration has continued to use the forecast number as its benchmark for deficit reduction.
Bush said he would continue to urge Congress to make permanent his first-term tax cuts, all of which are due to expire by the end of 2010.
Republicans are hoping to appeal to voters in the upcoming election as the party that champions tax cuts while casting Democrats, who contend that those tax cuts primarily benefited the wealthy, as the party which would increase taxes.
Both spending and tax revenues climbed to all-time highs in 2006. The sharp narrowing of the deficit reflected the fact that revenues climbed by 11.7 percent, outpacing the 7.3 percent increase in spending.
The 2006 deficit was far lower than the $423 billion figure the administration had projected last February and also represented an improvement from a July revised estimate of $295.8 billion.
Republicans said the big improvement showed that Bush's economic policies were working to stimulate growth and boost tax revenues. But Democrats said the narrowing of the deficit would be temporary as the pending retirement of 78 million baby boomers will send costs of the government's big benefit programs soaring.
"The fact that some are trumpeting this year's deficit number as good news shows just how far we've fallen. Our budget picture is extremely serious by any measure," said Sen. Kent Conrad (news, bio, voting record), the senior Democrat on the Budget Committee.
The nonpartisan Congressional Budget Office projects that the deficit for the current budget year will rise to $286 billion. Over the next decade, the CBO forecasts that the deficit will total $1.76 trillion.
Extending the Bush tax cuts, which are currently scheduled to expire at the end of 2010, would add another $2.2 trillion to the deficit through 2016, the CBO estimates.
The 2006 deficit was the smallest deficit since a $159 billion imbalance in 2002, a shortfall that came after four straight years of budget surpluses, the longest stretch that the government had finished with surpluses in seven decades.
Since that time, the government has recorded three of the biggest deficits in history including including an all-time record in dollar terms of $413 billion in 2004.
The reason for the improvement this year was a second consecutive big jump in revenues, propelled by strong economic strongth. The 11.7 percent increase in revenues was the second biggest percentage gain in history.
The administration credits its tax cuts for the improving economy, contending they helped the nation withstand the 2001 recession, the terrorist attacks and a wave corporate accounting scandals.
Democratic critics, however, contend that this year's improvement in the deficit will be only temporary. They contend the deficit is set to explode over the next decade as the baby boomers begin to retire and demands on Social Security and Medicare increase.
No comments:
Post a Comment