Wednesday, October 11, 2006

Budget deficit cut... again...

We're still in a deficit and the numbers show a spending increase. Fortunately that was offset by huge revenue increases...

Oct. 11 (Bloomberg) -- The U.S. recorded a budget deficit of $248 billion in the fiscal year ended Sept. 30, $48 billion less than the government predicted in August and the narrowest spending gap since 2002.

Revenue increased 12 percent from the previous fiscal year, led by a 27 percent gain in corporate income taxes, the Treasury said today in Washington. Spending rose 7.4 percent to a record $2.65 trillion.

The deficit is likely to widen again in the fiscal year that began this month as economic growth slows. For all of 2007, the economy will probably grow 2.6 percent after expanding 3.3 percent this year, according to the median estimate of 82 economists in a Bloomberg News survey completed yesterday. It would be the weakest performance since 2003, when the economy was starting to regain momentum following the 2001 recession.

Bush has called his strategy pro-growth, and despite the economic slowdown the economy is still on the black as far as quantatative growth. In fact Wall Street is now predicting that the Fed will start decreasing rates by June to help boost the economy and spur more growth.

And regardless of what numbers you use (projected or actual), Bush has slashed the deficit, and a war-time deficit at that. And while that should garner him praise (and it won't), we should also implore him and Congress as well to not get too carried away patting themselves on their backs just yet. A deficit is still a deficit, and with the projected economic slowdown over the next 6 months, we can't allow for another spending increase. Cut the fat, Dubya. Tell Congress to stop the pork. There's going to be less revenue coming in so we need less spending as well if we want that deficit to keep shrinking.

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