Semi-Daily Journal

What does Mankiw have to say for himself??

"A top White House economic adviser said on Wednesday the United States would likely run a budget deficit around 4 percent of U.S. gross domestic product next year and said growing shortfalls were a concern.

"Next year we will probably have a deficit in the ballpark of 4 percent of GDP, a little more -- maybe 4-1/2 percent of GDP," Council of Economic Advisers Chair Gregory Mankiw told the Excheckr Club in answer to a question.

"The deficit is a concern and the president has said many times ... that he's committed to getting it down," he said.

"He wants to shrink it in half toward 2 percent of GDP over five years, and his (fiscal 2005) budget will reflect that," Mankiw said, referring to a budget plan the White House will unveil early next year.

"There are two ways to do that: one is to get the economy growing again in order to get revenues, and the other is to restrain spending," Mankiw said.

Mankiw also told the group that the large U.S. trade gap was not necessarily a problem for the economy.

"I don't view it, in and of itself, as a risk to the U.S. economy," he said, saying it was largely symptomatic of a relatively slower pace of growth among U.S. trading partners.

"Slow growth abroad is one of the major contributors to our trade deficit," Mankiw said, because it curtails U.S. exports, and it contributes to a desire of overseas investors to place their money in the United States.

Mankiw said part of an adjustment toward more-balanced trade could involve an increase in domestic U.S. savings.

He noted President Bush had early this year proposed an expansion of tax-free savings accounts, but he stopped short of saying they would resurface in the fiscal 2005 budget plan.

"One of the things I've learned in my new job is don't get ahead of the boss, so I won't suggest it will be in the next budget. But I encourage you to stay tuned," Mankiw said.

Mankiw, who noted an updated administration forecast would be released with the budget proposal, said he expected the U.S. economy to grow above its long-term historical average of 3.3 percent next year but then revert toward the long-run trend as the economy approaches full employment.

http://money.excite.com/ht/nw/bus/20031217/hle_bus-n17326547.html

What does Mankiw have to say for himself???

http://money.excite.com/ht/nw/bus/20031217/hle_bus-n17326547.html

Most important, "Don't get ahead of the boss."

Here's an excerpt of Bush from the press conference the other day talking about the deficit:

"Josh Bolten laid out a plan that will shrink the deficit in half in a five-year period, and that's based upon reasonable growth assumptions. And it's a plan that depends upon Congress to continue to hold the line on spending. We have a deficit because of, one, a recession; two, a war. I want to remind you all that in order to fight and win the war, it requires an expenditure of money that is commiserate with keeping a promise to our troops to make sure that they're well paid, well trained, well equipped.

"And so we've exceeded--we've spent a lot on defense budgets in order to win the war. We've also spent a lot of money to secure our homeland. And then of course, there was the tax relief--a stimulus package which was necessary to make sure that we had ample revenues coming into the Treasury in the first place.

"See, without the tax relief package, there would have been a deficit, but there wouldn't have been the commiserate--not 'commiserate'--the kick to our economy that occurred as a result of the tax relief. And the tax relief is working. When the Senate finishes its work on the appropriations bill, we will have held discretionary spending to 4 percent, and that's what we agreed to with the Congress during the budget negotiations.

"I want to remind you of a fact that I think you'll find interesting--or maybe you won't find interesting, but I find it interesting--that nonmilitary, non-homeland security discretionary spending was at 15 percent--increase from year to year was at 15 percent prior to our arrival, then it was at 6 percent, 5 percent, and 3 percent. So we're working with Congress to hold the line on spending. And we do have a plan to cut the deficit in half."

Bush includes so many inaccurate statements here it's hard to know where to begin. These aren't "reasonable growth assumptions," it's not up to Congress alone to hold the line on spending, defense doesn't account for the huge rise in discretionary spending, and the growth rate of spending was much lower in the 1990s than it has been in his administration. The audacity is something to behold.

What a fraud Bush is. He is like a player in a poker game who plays with half the deck -- of course he has a better hand than anyone else. I wonder if events could unmask him as a fraud... much as Iraq has exposed the Administration's glaring incompetence. Is there any way that current trends e.g. the fall of the dollar express misgivings about the fiscal policies of the Administration?

bakho quoted, "'Next year we will probably have a deficit in the ballpark of 4 percent of GDP, a little more -- maybe 4-1/2 percent of GDP,' Council of Economic Advisers Chair Gregory Mankiw told the Excheckr Club in answer to a question."

Those numbers probably are *net* of the Social Security surplus. The gross, non-SS numbers are quite a bit worse.

bakho quoted, "'Next year we will probably have a deficit in the ballpark of 4 percent of GDP, a little more -- maybe 4-1/2 percent of GDP,' Council of Economic Advisers Chair Gregory Mankiw told the Excheckr Club in answer to a question."

Those numbers probably are *net* of the Social Security surplus. The gross, non-SS numbers are quite a bit worse.