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| Home Front: Politix |
| Kerry's Economic Deficit |
| 2004-07-16 |
| If it's not bad enough that rapid economic recovery has neutered Sen. Kerry's principal domestic criticism of President Bush, now comes even worse news for the Democratic campaign: The budget deficit is starting to substantially shrink. How'd that happen during a depression recession Bush presidency The latest budget numbers show a $19.1 billion surplus for June, $3 billion higher than the $16 billion Wall Street expectation. It seems that a flood of new tax collections, spurred by fatter employment payrolls and corporate profits, is rapidly reducing the federal budget gap. Tax receipts from businesses rose an astonishing 38 percent over the past twelve months and personal income-tax collections increased almost 9 percent. What's happening? Could it be that stronger economic growth from lower tax rates is producing more tax receipts? I believe it's called supply-side economics. Rest at the link. |
| Posted by:Steve |
| #2 A $400 billion deficit is not bad, neither is a $500 billion dollar deficit. The federal deficit is only one piece of the US deficit structure, the current account deficit. The current account deficit is what matters, not the one piece that the fed does. The federal deficit is a way for americans to borrow at a ridiculously low interest rate (far lower than we could personally). If we lowered the deficit we'd have to increase personal borrowing to maintain our standard of living, thus paying a far higher interest rate. As it stands our foreign income off of our investments in equity and debt abroad are 10s of billions greater this year (and historically billions greater every year) than our foreign payments to foreigners who own US equity and debt. Being that we have a current account deficit (not a surplus) this means we're borrowing at an effective negative interest rate. I don't know about you but if I was offered a negative interest rate I'd borrow as much as I could. |
| Posted by: Damn_Proud_American 2004-07-16 4:50:27 PM |
| #1 a $400 billion deficit is bad not as bad as a $500 billion deficit but still bad the problem for Kerry is that the only way to reduce the deficit and retain allegience to the dem party is to raise taxes |
| Posted by: mhw 2004-07-16 2:56:09 PM |