Tax Cuts Working: Budget Deficit Down

Democrats hate the idea of the economy on the rise - they want it to crash so they can demand they have the chance to make everything right by being voted into office -

The economy is going great guns as this article from the American Thinker details - but I predict that if the Democrats get into office the heads lines will read as a result of voting them into office the economy has turned around and is on the move. - and, of course, the public being as slow in the reasoning department as they have been in the past, will believe it all - pearls before swine -

Missing headlines
(a continuing series)Dan Scott

"Budget deficit continues sharp decline."

You probably haven't heard that the budget deficit is down sharply, and that federal tax revenues are soaring in the wake of the Bush tax cuts fostering increased economic activity (aka, prosperity).

The Bureau of Economic Analysis (BEA) updated the Current Receipts and Expenditures webpage detailing the current status of the US budget. Surprise, surprise, the 2006 annual budget deficit ended at $301,538,000,000 or for the big number people $301.5 billion (line 39). Why is this a surprise?

What have the Democrats been telling us about the Bush Tax Cuts? This 2006 annual budget deficit is approximately $155 billion less than the final tally of 2005.

This is occurring for some interesting reasons. The total receipts increased from 2005 to 2006 by approximately $383 billion (line 30). This means the Bush tax cuts are accelerating their effect and increasing revenue into the Treasury, not out of it as the Democrats have absurdly claimed. The previous yearly increase from 2004 to 2005 was $342 billion.

Total expenditures for 2006 increased by $229 billion (line 33). A hefty chunk of that increase, $86 billion, was for Government social benefits (line18). However, the previous 2004 to 2005 increase was more at $265 billion, in other words the pace of increase in expenditures is dropping. Look at line 18 for Government Social Benefits, and you will get a good idea why Bush was calling for Social Security reform.

For those interested in seeing the annual results of government operations go to the top of the BEA website, under the Series section click "Annual" There is a drop down menu for the years. Click the First year selection to pick a year. I suggest reviewing from 2000, the last year of the Clinton administration, to get the true perspective on increases both receipts and expenditures.

What all this information means is if we keep the current pace of increases in revenue and expenses, the budget will be balanced (a net positive) in 2009. We should anticipate a budget deficit of approximately $150 billion this year in 2007 and perhaps a miniscule deficit approaching zero in 2008 if the Democrats don't screw up the economy with their latest vote-buying scheme or environmental scare mongering with Global Warming or a tax increase.