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Tuesday, July 11, 2006
More on the Mid-Session Review
As the spender-in-chief pats himself on the back for managing to shirk the deficit to the fourth largest in U.S. history (via ThinkProgress), let’s take a look at a few things:
1. The surge in tax receipts is the result of a growing economy. Economic expansion is not dependent on tax rates. In fact, President Clinton raised taxes and the economy grew at what most would call a "good" pace. If marginal tax rates are 1% or 99%, an expanding economy will result in increased revenues.
2. The OMB has a habit of projecting of unrealistically large budget deficits so that the president can laud his tax policies for producing lower-than-expected deficits.
3. In numerous speeches and comments, the president repeats the refrain "we are on track to cut the deficit in half by 2009." Today, at his self-congratulatory press conference he said "We're way ahead of cutting the federal deficit in half by 2009. As a matter of fact . . . we're now a full year ahead of schedule."
But half of what? In the past twelve months, in the 43 speeches in which he mentions "cutting the deficit in half by 2009", Mr. Bush never - not once - mentioned what he is "on track" to cutting in half of. What OMB’s many budget documents state, but the president never says, is that he is "on track" to cut a $521 billion deficit in half. That’s right - Mr. Bush is going to cut a wildly-off-the-mark and never-materialized budget deficit.
4. The "surprise" surge in tax receipts comes mainly from corporate profits, executive bonuses, and capital gains. Only the well-off are seeing increased earnings, while for the rest of the country, real wages decreased in 2005. See, in other words, there’s a widening income gap. This supposed rising tide is lifting only yachts.
5. When Mr. Bush took office in 2001, he inherited at surplus of $236 billion. Today, he’s bragging about a $296 billion deficit. Things have certainly taken a turn since 2001.
6. The national debt in 2000 was $5.6 trillion. Since then, Mr. Bush has added $2.3 trillion in additional debt.
Posted by Craig Jennings
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