Brad DeLong's Semi-Daily Journal (2004)

I think they are planning on paying off their Visa with their MasterCard. Then repeat by paying off MasterCard with their Visa. By the time it breaks down, a Democratic president will be in office and they can blame everything on her.

Brilliant, really.

http://www.cbpp.org/1-26-04bud.htm

On the revenue side:

CBO projects that revenues will fall to 15.8 percent of the economy in 2004. This is the lowest level since 1950. (The figures in this analysis focus on revenues and spending as a share of the Gross Domestic Product, labeled here as the “economy.” The Gross Domestic Product is the basic measure of the size of the economy. Measuring spending and revenues as a share of the economy is the standard way that economists and budget analysts examine changes in the levels of revenues and spending over time.)

CBO projects that income tax revenues (including both the individual and corporate income tax) will equal 8.0 percent of the economy in 2004. This is the lowest level since 1942.

Without the tax cuts enacted in recent years — which will reduce revenues by $264 billion in 2004, according to Joint Committee on Taxation estimates — revenues as a share of the economy would not be close to a historically low level.
Key Facts That Emerge from the CBO Data

On the spending side:

CBO estimates that spending will constitute 20.0 percent of the economy in 2004, a lower level than in any year from 1975 through 1996.

If the nation were devoting the same share of the economy to government expenditures in 2004 as it has, on average, since 1980, expenditures would be $120 billion higher this year.

The large majority of the spending increases that have resulted from legislation enacted since the beginning of 2001 have come in the areas of defense and homeland security.

http://www.cbpp.org/1-26-04bud.htm

In 2004, as a share of the economy:

Federal revenues will fall to their lowest level since 1950, during the Truman Administration.

Federal spending will be lower than in every year from 1975 through 1996 (and thus will be lower than throughout the administrations of Presidents Carter and Reagan and the first President Bush).

In explaining the shift from a large surplus in 2000 to a large deficit in 2004, the drop in revenues since 2000 accounts for more than three times as much of the fiscal deterioration as the increase in expenditures.

http://www.cbpp.org/

CBO Data Confirm That Extending Tax Cuts Would More Than Double The Size Of Its Own Official Deficit Projections - 1/26/04

CBO shows in Table 1-3 on page 6 of its new report that simply extending the tax cuts and AMT relief would add another $2.9 trillion over the next ten years to its official deficit projections, bringing the ten-year total to about $5 trillion.

I have a question. I have been thinking about this since reading Paul O'Neill's book.

Was it irresponsible for the CBO to say that we will have a $5 trillion surplus over the next ten years?

It seems to be based on a lot of ifs and it caused discipline to fly out the window (that and a certain 5-4 ruling by the SCOTUS).

http://www.cbpp.org/

CBO Data Confirm That Extending Tax Cuts Would More Than Double The Size Of Its Own Official Deficit Projections - 1/26/04

CBO shows in Table 1-3 on page 6 of its new report that simply extending the tax cuts and AMT relief would add another $2.9 trillion over the next ten years to its official deficit projections, bringing the ten-year total to about $5 trillion.

In some respects it is misleading to say that "economic deterioraion" is responsible for 30% of the shortfall. In 1999, the economy was expanding at an unsustainable rate. Would a return from "bubble" to sustainable, be a real deterioration? By that standard reasonable economic growth rate is labeled "deteriorated". I would like to see the economic factors divided into deterioration from realistic growth and misleading economic forecast. By making these adjustments, it is much more clear that the "surplus" in 1999 was overstated, and that the Bush tax cuts are responsible for a lot more of the deficit than simple "economic deterioration".

The GDP went from roughly $10 Trillion in Jan 01 to $11 Trillion in July of 03, or a 10% increase in 2.5 years. If we were collecting the same percentage of revenue today that we were in 2000, the budget would be in balance, not deficit.

It's the standard Bush MO. Everywhere he's been (except the Rangers, where he wasn't really running things), he's taken a going concern, run it into the ground, and been bailed out by his daddy's rich friends.

Mike: You probably can add the Rangers to that list. The only reason it was a financial success was the land/stadium deal, that was done through his Daddy's connections and at the expense of the landowners who were subject to eminent domain. Otherwise the team would not have performed well financially and did not perform well on the field.

Here in Toronto a prominent lawyer -- one so prominent that the newspapers are not even reporting his name, though they do report the address of the office -- has just been arrested for running a crack house out of his office. What is striking about the story is how oblivious the man was to all around him as his stoned-out customers populated the neighborhood and aroused the ire of his neighbors, as the police set up watch posts around him, and as he laughed to reporters that he could never be arrested because he was a lawyer.

What struck me about the story was the awesome resemblance of the man's attitude to that of George Bush as he ruins the good faith and credit of the United States. What Bush is running is a regime of coke fantasy foreign policy and crackhead economics.

Even the State of the Union Address, with its weird assortment of irrelevant issues -- a federal marriage bureaucracy, concern about athletes using steroids -- has the look of desperate jonesing around on the floor for butt-end issues.

It's a commonplace that drug users group themselves by drug and by personality. Cocaine users are disproportionately advertising people and con men, and the pathology of cocaine is that of overconfidence, blithe immunity to reality, unconcern about the consequences of actions in the real world.

George Bush is America's Crackhead President.

If taxes increases are the simple answer, as many seem to imply here, then why did the Bush 1 tax increases not close the deficit in the early 90's?

Nil desperandum! - Never despair! (Horace)

Aegrescit medendo - The disease worsens with the treatment (the remedy is worse than the disease)

Crescit amor nummi, quantum ipsa pecunia crevit - The love of wealth grows as the wealth itself grew. (Juvenalis)