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Craig
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PostPosted: Sat Oct 07, 2006 9:40 am    Post subject: Budget deficit drops to $250 billion Reply with quote

Budget deficit drops to $250 billion

By ANDREW TAYLOR, Associated Press Writer 17 minutes ago

WASHINGTON - The federal budget deficit estimate for the fiscal year just completed has dropped to $250 billion, congressional estimators said Friday, as the economy continued to fuel impressive tax revenues.

The Congressional Budget Office's latest estimate is $10 billion below CBO predictions issued in August and well below a July White House prediction of $296 billion.

The improving deficit picture Bush predicted a $423 billion deficit in his February budget has been driven by better-than-expected tax receipts, especially from corporate profits, CBO said.

The 2005 deficit registered $318 billion; the record $413 billion deficit was posted in 2004.

At $250 billion, it would be the lowest since the $158 billion figure in 2002, the first deficit following four years of surpluses.

The CBO estimate continues a positive trend on the deficit after a grim deficit performance during
President Bush's first term, and comes despite soaring war costs and $50 billion in emergency spending for hurricane relief.

House Budget Committee Chairman Jim Nussle, R-Iowa, credited the improving deficit numbers to "a responsible budget blueprint and pro-growth policies," even as Democrats pointed out that at $250 billion, the deficit is still one of the largest in history.

"Though today's estimates for 2006 are not as pessimistic as some earlier estimates, it is clear that the budget remains on the wrong track," said top budget panel Democrat John Spratt Jr. of South Carolina. "The Congressional Budget Office and even the Bush administration are estimating that deficits will be even larger next year."

But when measured against the size of the economy, which is the comparison economists think is most important, the deficit picture looks even better.

At 1.9 percent of gross domestic product, the 2006 deficit registers far below those seen in the 1980s and early 1990s. The modern record of 6 percent of
GDP came in 1983 and deficits greater than 4 percent in 1991 and 1992 drove Congress to embark on a 1993 deficit-cutting drive.

Still, the long-term deficit picture remains bleak due to the looming retirement of the Baby Boom generation, which threatens to swamp
Social Security and the Medicare health care program for the elderly.

The CBO estimates reflect actual government revenues and expenditures through August and estimates for September. The Treasury and the White House budget office are expected to release official deficit numbers next week.

Tax receipts are up $253 billion, a whopping 12 percent over last year. That's the thirds consecutive year of strong revenue growth after a dismal performance in the early part of the decade. Revenues dropped three years in a row after fiscal 2000 but picked up again in 2004.

Taxes paid quarterly on corporate profits and by wealthier people and small businessmen were especially strong in 2006. Corporate income taxes rose 27 percent over 2005 while nonwithheld receipts increased 19 percent.

In contrast, income taxes and payroll taxes for Social Security, Medicare and unemployment insurance grew by only 7 percent. Critics of GOP economic policies say that's a sign that lower- and middle-income people aren't getting as much of a lift from the current recovery.

"The benefits of the economic expansion have not been equally distributed," said Jim Horney, a budget analysts for the liberal-leaning Center on Budget and Policy Priorities.
kwlafayette





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PostPosted: Sat Oct 07, 2006 9:44 am    Post subject: Reply with quote

Is 250 billion more than our entire GDP here in Canada?
biggie





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PostPosted: Sat Oct 07, 2006 11:07 am    Post subject: Reply with quote

No, Ours is over 1 trillion.

US is 12 about 12 and 1/2 trillion

It is greater than our budget though ;)
jnarvey





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PostPosted: Sat Oct 07, 2006 9:13 pm    Post subject: Reply with quote

Yup. A $250 billion budget deficit is pretty disgusting. Even with a $12.1 trillion GDP, the US is in trouble - national debt is now at 64 per cent of GDP.

Bush may or may not be a good war president - but his fiscal record is downright embarrassing.

Thankfully, our own economy seems to be making progress in shrinking our own debt (first built up under Trudeau). The latest is a $13 billion surplus the Harper government just put into debt repayment. Way to pay down the mortgage.
biggie





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PostPosted: Sun Oct 08, 2006 1:13 pm    Post subject: Reply with quote

jnarvey wrote:
Yup. A $250 billion budget deficit is pretty disgusting. Even with a $12.1 trillion GDP, the US is in trouble - national debt is now at 64 per cent of GDP.



Its not possible to pull a surplus when you're at war in two separate theatres... with 250,000 troops deployed throughout the world (180,000 or so which are currently in warzones)...

Its understandable that they would be running deficits..

But I agree... Bush's ability to run a fiscally prudent government is questionable to say the least.
jnarvey





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PostPosted: Sun Oct 08, 2006 4:57 pm    Post subject: Reply with quote

Quote:
Its not possible to pull a surplus when you're at war in two separate theatres... with 250,000 troops deployed throughout the world (180,000 or so which are currently in warzones)...


I understand that war-fighting requires extraordinary expenditure. But these wars are possibly the first in history where involvement in a conflict hasn't gone hand in hand with a tax grab. With the world's largest economy and the highest per capita earnings, the US can well afford a war tax to help pay for its defense expenditures. A gas tax would probably be the most appropriate for this purpose.

The Bush government is afraid of making American citizens open their wallets for fear of alienating voters. I suspect that most taxpayers would be reluctant but ultimately willing to make the sacrifice of an extra buck for a fill-up if the reason for it was explained to them. It just shows that even the wealthiest, most powerful country in the world can't fight a war without great sacrifice - in blood and treasure.

The funny thing is, you would have thought they'd have learned this lesson back in Vietnam - when they tried the exact same trick and ran up the debt so far that the US dollar was forced to become a floating currency.
PostPosted: Sun Oct 15, 2006 11:26 pm    Post subject: Reply with quote

jnarvey wrote:
Yup. A $250 billion budget deficit is pretty disgusting. Even with a $12.1 trillion GDP, the US is in trouble - national debt is now at 64 per cent of GDP.

Bush may or may not be a good war president - but his fiscal record is downright embarrassing.

Thankfully, our own economy seems to be making progress in shrinking our own debt (first built up under Trudeau). The latest is a $13 billion surplus the Harper government just put into debt repayment. Way to pay down the mortgage.


Thanks to big recession after 9/11 and two wars they HAD to fight, this is no big deal
McGuire





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PostPosted: Thu Oct 19, 2006 3:11 pm    Post subject: Reply with quote

Still there is a lotta waste in the US budget that must be addressed that could nearly eliminate the defecit. there was a proposal by a number of GOP congressmen to do cut somewhere b/w 200 & 300 billion & doing so w/o cutting national security, education or health spending.
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Budget deficit drops to $250 billion

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