A President that is OUT OF TOUCH!

Another useless post about Bush. Gloom and doom col, do you ever wonder why people like you don't get elected?

This week, the White House will revise its fiscal year 2006 budget deficit estimate to roughly $300 billion, a significant reduction from its January forecast of $423 billion. This will continue the White House's pattern of very conservative estimates. Our calculations suggest that the federal budget deficit this year will be approximately $260 billion. This is down from $318 billion in FY-05 and $413 billion in FY-04. Strong gains in tax receipts have overwhelmed increased federal spending. Congressional Budget Office (CBO) data show that federal tax receipts during the nine months ending in June were 12.8% above the same period in FY-05. Withheld income taxes increased 9% in June from last year; non-withheld income tax payments surged by 20%, while corporate tax receipts grew by 17%. If federal receipts continue to grow in a similar fashion during the final three months of this fiscal year, they will climb to an all-time high of $2.4 trillion dollars, $275 billion above last year, $400 billion more than in 2000, and equal to 18.5% of GDP. Federal spending is on track to increase 9% this year, and will end the year at 20.7% of GDP, up sharply from the 18.4% share in 2000. If federal spending had remained at 18.4% of GDP this year, the US would have recorded a small surplus of $21 billion. It has become popular to say that, "tax cuts do not pay for themselves." In fact, Henry Paulson, who will be sworn in today as the 74th US Treasury Secretary, was all but forced to say this in his confirmation hearing last month. The problem is that it is not clear whether this statement actually means anything. In a static world, tax cuts do not pay for themselves. But the world is not static. As Secretary Paulson said at his Congressional hearing, tax changes affect people's behavior. As a result, tax changes alter the course of the economy. To assume otherwise is naïve. Equally as important is the fact that different types of tax cuts impact the economy in different ways. In 2001, most reductions in marginal income tax rates were phased-in over many years. But, if people know that tax rates will be lower in future years they will push as much economic activity as they can into those lower tax years. This resulted in anemic economic growth (and declining tax revenue) during 2001, 2002 and early 2003 even though the Fed was cutting interest rates. The 2003 tax cut ended the phase-in, accelerated the tax cuts and reduced tax rates on qualified dividends and long-term capital gains. This caused an immediate acceleration in business investment and tax revenues surged. In fact, inflation-adjusted tax revenues have grown more than 10% annually over the past two years; a feat rarely accomplished in US economic history. As a share of GDP, tax receipts are still well below the 1998-2000 average of 20.3%. But those were abnormal years. Since 1930, there have only been 19 years in which the tax share of GDP was at or above 18.5%, and in the past 20 years, tax receipts have averaged 18.3% of GDP. This means tax receipts in 2006 will be above historical norms. Since the tax cut was passed in May 2003, US GDP has expanded by more than 20%, or roughly $2.2 trillion. To put this in perspective, we have added more to GDP in the past three years than an entire China (current estimate of $1.9 trillion in annual GDP). In the three years before the tax cut, GDP in the US grew just 10.4%. Most importantly, tax revenue trends suggest that government statistics are underestimating economic growth. People and companies do not pay taxes on income or profits they do not earn. There is no sign of a slowdown in the budget data.

Then when you look at the Bush numbers you see he has LIED about the deficit by subtracting the surpluses from Social Security and Medicare BEFORE he reports the numbers.

Politicians have been misreporting and fudging Social Security funds in order to prop up their budgets for decades now. Bush came up with it? Give me a break.

IslandDog

You post confirms what I said. Bush has lied about the size of the deficit by subtracting the $200 Billion in Social Security/Medicare Surplus and is running around claiming a $500 Billion deficit is an accomplishment. What is worse then having a useless President is having a President that is driving our country into fiscal trouble and people like you that defend such a policy.

Found what I was looking for... From Ethical Positions: Looting the Trust Funds, dated 1998.
"Off budget" expenditures are exempt from the normal controls in the congressional budget process. Revenues remain attached to the particular project being funded and cannot be redirected for other purposes. In FY 1997, more than $350 billion, or 22 percent of spending, was off budget.

One might believe that the hundreds of billions of dollars rolling in to the Federal government through excess Social Security contributions is being placed in a trust fund. It should be saved there for a time when it is needed. But, no! Instead, this money goes directly into the general fund and is counted as income to help balance the budget. In FY 1997 Social Security pulled in an excess of $81 Billion into the general fund. In FY 1998 it added $100 Billion to the general fund.

What's placed in the Social Security trust fund to replace the excess revenue collected? Nothing more than IOUs in the form of non-negotiable treasure bonds. Senator Earnest "Fritz" Hollings has indicated that "The truth is that the Social Security Trust Fund has already been stripped bare. There is no trust and no fund." Not only is the trust fund bare, but the liabilities of the Federal government grow larger as the amount of bonds in the fund increases.

So unless Bush was president in 1997/1998, this has been going on since well before GWB came into office.

If your beloved Clinton can do this same thing and you give him credit for balancing the budget, how come you can't accept this practice as a given when GWB does it too?

Singrdave

That does not alter the fact that by combining the SS and Medicare Surplus with the general Fund Bush is making the annual deficit appear $200 Billion per year smaller. This was not the problem it is today before we started running the large deficits since 2001. The point of this Blog is that Bush is telling everyone how great it is to only have a $500 Billion deficit rather then a $620 Billion deficit. What BS. If he had balanced the budget the way it was when he took office he would have done something good for this country. He and Reagan are the two most fiscally irresponsible Presidents’ in our 230 year history! Between them they added 90% of the National Debt to the books and we will be spending $400 Billion EVERY YEAR more in Interest on that added debt. That is about what we spend on national defense and the interest BUYS US NOTHING. It pays for the past when we spent more then we taxed and our children and grandchildren will pay for our stupidity!

Since 1980 we have paid $6.5 Trillion Dollars in interest on the national debt!

I think I read this article last August.

Who would boast about an economic policy that during this so called boom is producing a $300 Billion dollar deficit in ONE year?

I  guess it's about the same as the people who bragged about how Clinton "balanced the budget" or how a reduction in the growth of spending is a "cut"... or how about how pulling our troops out and leaving the people of Iraq to the bacteria isn't "surrendering", but an honorable act?

What's the difference between these things and today's news about the deficit?  The news about the deficit isn't a bold faced lie. 

 

We have NEVER had a president that was a fiscally irresponsible as Bush and Reagan. They are responsible for almost 8 Trillion Dollars of the National Debt. The interest we must pay each year will increase from about $100 Billion per year to $500 Billion EVERY year. Not Clinton, Carter, Bush 41 and anyone else except Bush 43 and Reagan have come even close to that result. We will be spending MORE on interest on the debt then we spend on National defense.

You could turn in your retirement check and help reduce the deficit.

You did not mention the higher rate of tax revenues. Wonder why?

I must be psychic, I knew who wrote this drivel before I clicked on it.

Let's see...

Bush promises to halve the deficit during his second term.

Financial analysts both inside and outside of the government agree that Bush is on track to halve the deficit as early as this year.

Bush cut tax rates.

Tax revenues are up.

Gene thinks all this is a terrible problem, somehow.

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I have to admit, the only one of those that didn't surprise me was the last one.

You total idiot. Reagen ushered in decades of prosperity and Bush has made a monkey and a liar out of you at every turn. What did Clinton do? Absolutely nothing, he merely partied for 8 years and claimed responsiblity for the benefits of his timing. Meanwhile he did nothing about terrorism or the fact that Hussein was getting rich, mocking the useless UN and shooting at our pilots while Clinton cowered in the corner with Monica Lewinsky. I have been reading you, off and on for 18 months now, only once or twice have I seen any of your BS occur.

Perhaps we should feel heartened at the prospect of spending more on the debt than on defense: less money for killing people and breaking things, and we'll still have enough left to buy guitars, built campfires and sign Kumbayah with the rest of the world.

Let's see, col hates Bush, hates Reagan, wants to raise taxes and run away from our enemies. Don't insult the rest of us by calling yourself a Republican ever again.

stutefish

The budget was balanced when Bush took over.
Bush created the imbalance by increasing spending and cutting taxes
The Bush tax Cuts have caused over a trillion dollars of the debt Bush has piled up
Cutting the annual deficit in half does not STOP the debt from growing and does NOT pay off the more then 4 Trillion Bush added to the debt.

IslandDog

Republicans do not do Nation Building (Iraq)

Real Republicans BALANCE THE BUDGET

I am the REAL Republican not like Bush and the GOP in Congress!

It took 19 years to fix the budget Reagan screwed up. Bush destroyed it the FIRST year he was in office. It could take decades to fix what Bush has done. Spending 1/2 a Trillion dollars paying interest on a debt that should not exist is a VERY BIG DEAL that will harm our country.

~The budget was balanced when Bush took over. LIE.. Prs. Clinton NEVER balanced the budget, he merely submitted a budget that left much of the spending to the states or just "off budget".

~Bush created the imbalance by increasing spending and cutting taxes. LIE... The government has collected MORE revenue since the tax cuts... now if you want to talk about how they still spent a lot more than they took in.. you have a point.

~The Bush tax Cuts have caused over a trillion dollars of the debt Bush has piled up
Cutting the annual deficit in half does not STOP the debt from growing and does NOT pay off the more then 4 Trillion Bush added to the debt. LIE

The recent announcements show that this isn't even arguable.

Once again Col.. Liar Liar pants on fire..

Bush destroyed it the FIRST year he was in office.

That statement alone shows you have no idea what you are talking about. Bush didn't destroy the economy his first year. The economy was already heading downhill from the policies of a democratic administration. Do you know anything besides blaming Bush.

I am the REAL Republican not like Bush and the GOP in Congress!

Your arrogance is just as amazing. Every policy and idea you favor is the direct talking points of the DNC and far left liberals. You are no Republican.

Parated2K

Better look again:

In 2000 the federal budget, NOT INCLUDING the Surpluses from Social Security and Medicare, was BALANCED. That was the result of four factors:

Good economic growth during the 1990's
The Bush 41 tax increase (read my Lips)
The Clinton tax increase
Reduced spending on Defense which started during the Bush 41 Administration.

As to shifting expenses to the states, Bush is the champion of that process. Just look at what he has done with Medicaid and the funding for Homeland Security.

The growth from the Bush tax cuts has not created enough NEW TAX Revenue to offset the loss in tax revenue from the tax cuts and the increased spending. GAO and the Comptroller General of the U S has documented that the tax cuts ARE CAUSING part of the annual budget deficit.

Reagan did the very same thing. If you go back to 1981 when he was selling his tax cuts to Congress, he said that if Congress passed his tax cuts, which they did, by 1985 the Federal Budget would BE BALANCED! That NEVER HAPPENED. In fact, during the Reagan years the National Debt went from $900 Billion to $4 Trillion dollars. The deficit continued through 1999 and from 1988 to 1999 another $1.7 Trillion was added bringing the total National debt to $5.7 Trillion when Bush 43 took office. OMB, part of the President's department, has said that by the end of the Bush 43 second term, the National debt will be $10 Trillion and the annual interest we will be REQUIRED to pay on that debt will have jumped from $90 Billion to $500 Billion and in 2009 we will still be running a annual budget deficit of between $250-300 Billion per year not counting the SS and Medicare surplus.

IslandDog

The NO Nation Building is and has been a Republican Principal.

A balanced Budget likewise has been a Republican Principal - Remember the Push by the GOP for the Balanced Budget Amendment?

Today the DNC has adopted these two principals because they are what are BEST for our country. The GOP has abandoned what is best for America!

Today the DNC has adopted these two principals because they are what are BEST for our country. The GOP has abandoned what is best for America!

What will the DNC do for this country then col? If you support them so much then why don't you finally admit that you are a true liberal?

The DNC has adopted two of your core principles, surrener and high taxes. Thanks guys.

If higher taxes are needed to BALANCE the Budget then that is what must be done!!! We can not continue to simply put it on the TAB like Bush and the GOP is doing!

As it turns out, tax revenues track more with economic growth than with tax rate increases.

Indeed, economic experts both inside and outside the government are pointing to the Bush tax cuts as one of the primary causes of the recent increase in tax revenues.

How does that fit into your theory, Gene?