Conservative Bastion
The only blog that can factually claim to shift the Bell Curve, along with the hearts & minds of America, to the right.
Friday, February 23, 2007
Did Bush Balance the Federal Budget?
There’s some new and interesting news out in the Christian Science Monitor regarding the federal deficit:

Despite the ongoing costs of US military campaigns in Iraq and Afghanistan, the outlook for the federal budget has grown substantially brighter.

Tax revenues are rising much faster than spending, according to Treasury Department numbers released last week. The recent trend is strong enough that, were it to continue, the budget could move into surplus in barely a year, one economist calculates.

Already, the federal deficit is shrinking toward about half the size that it has averaged since 1970, when analyzed as a percentage of gross domestic product.
This really underscores how Clinton was able to balance the budget. It has a lot less to do with his fiscal discipline or the fact that he raised taxes, and had a lot more to do with the strength of the economy.

That is why I personally get extremely annoyed when people say that Bush has ruined the economy with his deficit spending or whatever nonsense they manage to get out of their mouth.

The fact is the economy is now improving and the budget is practically balancing itself. When the economy was bad, that was when the deficit was huge. A bad economy will lead to bad business. When business is bad, they make less money. When they make less money, they pay less taxes. You would think that this is pretty self-explanatory, but many American’s don’t have the smarts to figure it out on their own.
StumbleUpon Toolbar Stumble It!
2 Comments:
Blogger halliburton said...
well-said.

No, Bush did not balance the budget, or even come close to doing so. The relief of the economic growth has given to the federal deficit, is most likely very temporary, or in the other words of federal reserve chairman Ben Bernanke in his testimony to the committee on budget, House of Representatives February 28, 2007 "Unfortunately, we are experiencing what seems likely to be the calm before the storm."
You can not simply rely on economic growth to balance a budget. You must control spending, in particular spending on entitlements such as social securites, medicare and medicaid, assuming defense spending is significantly reduced as promised if not include that. Even though a strong economy helps it alone is not enough Bernanke "To some extent, strong economic growth can help to mitigate budgetary pressures, and all else being equal, fiscal policies that are supportive of growth would be beneficial. Unfortunately, economic growth alone is unlikely to solve the nation's impending fiscal problems" The problem here is that when the economy grows so do the entitlements associated with it. The economic growth can not keep up the rising healthcare costs or even stay in the same ballpark.
With life expectancy growing longer, and fertility rates declining we will have less people paying into a system for a growing population. We have to come with a system to reduce healthcare costs, to balance the budget.
I will agree that Bush's policies promote economic growth, but he fails to deal with the associated cosequences come with it which make it virtually impossible to balance a budget.
You can read Bernanke testimony here it far more effective than what i say http://www.federalreserve.gov/boarddocs/testimony/2007/20070228/default.htm

Links to this post:
Create a Link