I heard an article on this deficit nonsense yesterday on NPR. Not only did they credulously swallow the White House talking points, the economist they called to interview and agree that is was wonderful news was a former Bush White House flack. This morning they were spouting more White House talking points, so this seems to be the new NPR. Why aren't people asking what happened to the surpluses and why a $300 billion deficit can possibly be considered a good thing? How does going from surplus to deficit ever mean their economic policies are working?

I agree that supply-side economics is bad voodoo, Bushonomics is worse, and they are clearly spinning their projections.

However, the facts (http://www.cbo.gov/budget/historical.pdf) are that the deficit has been decreasing since 2003. I was hoping this article would provide an alternate explanation as to why that was the case.

Anyone else?

Well, wrenhunter, I'll try to answer one of your questions - an alternative explanation for why the deficit is decreasing.

This baseless Bush "economy" is built on ephemera - it is a consumer "confidence" game that depends on perceived gains in the housing market. Low interest rates led to faster and higher rates of residential development and sales. But the only money being pumped into that pond already belongs to the consumer - who is merely pricing himself out of his own ability to secure housing for his family and contributing mightily to banking profits.

As long as interest rates have been low, consumers suckered by the con have believed that they are "earning" their way up the prpoerty ladder. However, even as their contributiuons to a pretend economy fuel the future crash and, simultaneously, erode their buying power, the only money being pumped into that pond already belongs to the consumer - who is merely pricing himself out of his own ability to secure housing for his family and contributing mightily to banking profits.

Deficits have subsided because of taxes generated by this housing "boom" - but will return as soon as the Fed realizes that it has over-corrected for inflation and now needs to act to forestall deflation.

And, at that point, every one who has moved up the propoerty ladder without also securing larger sources of income will feel the pressure.

Maybe you can't fool all of the people all of the time but you can fool enough of them enough of the time to keep yourself afloat. There are still at least two and a half years of this nonsense to go. And does anyone really believe this bunch aren't going to maintain control of both houses? And does anyone think these folks haven't developed a plan to hold onto the Executive Branch? Say what you will, they plan and execute with incredible precision.

Word for the day: tergiversate

This article would have been somewhat better if it had given the contemporaneous CBO estimates for each Bush estimate given. That would have emphasized the consistent highballing by the administration.

The deeper question no one ever asks the White House: So every year you've wildly overestimated the original deficit, necessitating a public walk back to the real numbers. Why should we have any faith in people who consistently miss the ball?

The only portion of this article that actually said anything of use was:

In July 2003 the fiscal year 2003 deficit was estimated at $459 billion; the actual outcome was $378 billion. In February 2004 the fiscal 2004 deficit was estimated at $521 billion -- more than $100 billion higher than the Congressional Budget Office's contemporaneous estimate, and $108 billion higher than the actual fiscal 2004 deficit of $413 billion. In January 2005 the administration's forecast for the fiscal 2005 deficit was $427 billion. The deficit came in at $318 billion. In each case the Bush administration trumpeted the "progress" on the deficit made relative to the benchmark set by its own highballed previous forecasts.

Which shows that the deficit is $318 billion now, and was $378 billion in 2003.

Now, we may reasonably argue that a $318 billion deficit is not good; however, we may not argue that $318 billion isn't less than $378 billion and is, in fact, a reduction in the budget deficit where the Democrats said that there would be an increase.

The rest of this article was designed solely to make Bush look dishonest, which may be true (I would say that they are playing political games, which is also true). What the article did not do was make the truth of tax cuts go away: tax cuts decrease the burden on well-educated working people who've sacrificed much and worked hard to attain their positions (in most cases), while increasing revenues to the state to help support the less motivated, less well educated bottom 30% of workers.

I agree that both sides spin numbers and projections to smear the other side and pat themselves on the back, and I am the first to admit that I'm no economist.

But doesn't a surplus mean that the government took money from it's citizens (under threat of revocation of their liberty for non-compliance) without giving them anything in return?

And are deficits always bad? I'd hate for someone to say I'm a failure as the breadwinner of my household just because I have a mortgage.

Seems to me that controlled, reasonable deficits that are not historically high when expressed as a percentage of GDP are not a plus for the left's column. There's plenty of which to be critical in this administration, but when their victories are derided as failures, you risk centrists like me tuning out your legimate concerns as perhaps also doublespeak of which to be suspicious.

The article does not mention whether the cost of the wars in Iraq and Afghanistan are included in the budget figures. In the past they have been kept separate in their own special category. However, I think it is confusing the issue to not acknowledge that the wars are also providing a stimulus to the economy, generating business activity, and tax monies. In my own small local area I know of one manufacturer that is producing body armor and one that is reconditioning tanks (which, because of the effect of sand, need reconditioned freqently). Heck, these are the only manufacturing jobs left around here. The Bush administration would have us believe that the decreasing deficits are due entirely to the tax cuts. While the tax cuts may have contributed in some ways, I don't think the economic stimulus of war is insignificant. The problem is only the "positive" side is being included in the budget (but conveniently not acknowledged) and the negative side is put in an entirely different ledger.