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Thursday, January 04, 2007
Implausible Deniability: the Direction of the Deficit
“Bush Says Plan Would Balance Budget by ’12,” an article in yesterday's New York Times, includes this sorry sentence: “During his re-election campaign in 2004, Mr. Bush promised to cut the deficit in half by 2009. Though the prediction was greeted with widespread skepticism, that goal now looks increasingly plausible.”
Indeed, that prediction was met with widespread skepticism, but not because it seemed implausible. As we have noted, President Bush and OMB inflate deficit forecasts in order to claim victory when actual deficit numbers turn out to be smaller.
In 2004, President Bush created an artificial projected deficit figure for 2005 of $521 billion and then promised to cut that in half by 2009. In 2005, the president projected a $426 billion deficit; it turned out to be $318 billion. Those numbers in 2006 were, respectively, $423 billion and $248 billion — $175 billion off, OMB’s worst prediction in 21 years… but less than half of $521 billion!
Sadly and more significantly, the statement in the Times belies the nation's true fiscal condition. In today's Washington Post, this from Heritage Foundation analyst Brian M. Riedl:
With the cost of Social Security, Medicare and Medicaid on the rise, Riedl said he projects the annual deficit will grow to $750 billion in 10 years. "The reduced deficit of the last two years looks more like a short-term blip than a long-term trend," he said.
Posted by Dana Chasin
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