Bush's Insulting Deficit Scam

Am I rejoicing that the current federal budget deficit will "only" be $296,000,000,000 this year, as opposed to the $423 billion it was projected to be earlier this year? No--and here's why:

• The announced deficit is the fifth largest in American history.
• The announced deficit is only slightly less than the $318,000,000,000 deficit last year.
• This is the third year in a row that the Bush Administration has mysteriously announced a giant deficit projection in the spring and then come up with a lower actual figure in the summer. It's called the expectations game, and it's a BS public relations scam.
• By 2011, under Bush's influence (even though he will leave office in 2009) the total federal debt will have doubled from what it was in 2001.
• It is not clear how much of the spending for Iraq is included in these figures.
• The government is still milking the Social Security surplus to make its current accounts budget look better.

The Concord Coalition, strong deficit hawks all, sounds the warning:

The Concord Coalition also urged lawmakers and the public to keep today's new numbers -- particularly the revenue growth -- in perspective. Adjusted for inflation, revenues are just now reaching their level of five years ago. As a percentage of GDP, revenues fell from 20.9 percent in 2000 to 16.3 percent in 2003 - - the lowest such number since 1959 -- before rebounding this year to the administration's projected level of 18.3 percent. Meanwhile, spending has risen from 18.4 percent of GDP in 2000 to 20.6 percent under the Administration's policies.

"Before supply-side advocates give credit to the tax cuts for the increase in revenues over the last two years they first must acknowledge that tax cuts bear some responsibility for the extraordinary three-year decline in revenues from 2001 through 2003," said Concord Coalition Policy Director Ed Lorenzen. "Much of the recent increase in revenues is a result of revenues simply rebounding from the lowest levels as a percentage of the economy since the 1950's," Lorenzen said.

Concord cautioned against drawing an inevitable connection between tax cuts, economic growth and higher revenues. For example:

-- In the five years following the tax increases of 1993, annual real economic growth averaged 3.8 percent. In the five years since the tax cut policies began in 2001, annual real economic growth has averaged 3.1 percent.

-- In the five years after the tax increases of 1993, annual revenue growth averaged 8.3 percent. In the five years after the tax cut policies began in 2001, annual revenue growth has averaged 4 percent.

"These numbers certainly do not establish that tax increases are better for the economy than tax cuts, but they do establish that the tax cuts enacted over the past few years are not necessarily needed beyond their expiration date to ensure economic growth. The best fiscal policy is one that balances spending and revenues at a sustainable level over the long-term," [CC Director Robert] Bixby said.

The Republicans always try to bamboozle everyone with this ludicrous "great economy" nonsense, but it's not working. People aren't buying it because they aren't seeing it. Wages have stagnated. Energy costs are out of control, huge mortgages loom over many peoples' heads, and medical care costs are through the roof. The economy's "prosperity" is built on loose credit, borrowed money, and gargantuan debt. It's a house built on the sand, to use a Biblical metaphor.

Bush is dragging America to fiscal disaster, and his enablers in the Republican held Congress are doing everything they can to help him do it. This "good news" on the deficit is a farce, a dishonest dog and pony show meant to deceive. But the act is getting old and the reviews are overwhelming: It's time for this lousy show to get off the stage.