Budget deficit hits record $395.8B

[freedomburns]

http://money.cnn.com/2004/08/11/news/economy/budget_deficit.reut/index.htm

Budget deficit hits record $395.8B
 
Treasury says July deficit was bigger than expected; final 2004 gap could set a new record.
August 11, 2004: 4:10 PM EDT
 

WASHINGTON (Reuters) - The U.S. federal government ran a larger-than-expected budget deficit in July, bringing the year-to-date shortfall between receipts and spending to a record of nearly $400 billion, the Treasury Department said Wednesday.

In its monthly budget report, the Treasury said the July deficit was $69.16 billion, based on revenues of $134.42 billion and spending of $203.58 billion. That was above the $61 billion shortfall Wall Street economists had expected and wider than July 2003's $54.24 billion deficit.

With only August and September left in the 2004 federal budget year, the red ink through the first 10 months totaled $395.8 billion. That's ahead of the revised record

The final 2004 gap is widely expected to set a new record topping $400 billion. In its recent budget review, the Office of Management and Budget said it expects the deficit to be about $445 billion this year, while the Congressional Budget Office has projected a more conservative $422 billion.

While those estimates are lower than ones made at the beginning of the year, they have not insulated the White House from political attacks by Democrats.
The White House says the deficits, when compared to the size of the U.S. economy, remain manageable and are the result of slower revenues due to the recession and September 11 attacks in 2001 and more spending for defense and security.

Democrats have placed much of the blame for the return to annual deficits -- after surpluses seen from 1998 through 2001 -- on the Bush administration's tax cuts.

The gap has also helped prompt the administration to call, early this month, for an increase in the federal borrowing limit for the third time in four years. Without a hike, Treasury Secretary John Snow warned in a letter to Capitol Hill leaders, the government could run out of financing means in mid- to late-November. That could set the stage for a partisan struggle over raising the ceiling this fall.
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Through July, the government had raised $1.535 trillion in revenues, up 4.0 percent from the same period in 2003. Spending, driven by a hefty gain in defense outlays, rose at a faster 7.2 percent clip, to $1.930 trillion through July.


http://money.cnn.com/2004/08/11/news/economy/budget_deficit.reut/index.htm

freedomburns

[The Duke]

I don't know how many times I've said this, but it isn't a record deficit because you didn't adjust for inflation.  On behalf of economists everywhere, please adjust for inflation!

[A18]

The Bush tax cuts brought in more money to government (same as the Reagan cuts). But spending has more than made up for it.

[johngalt1234]

Budget deficits...

Inflation has got nothing to do with it... because both receipts and spending are inflation adjusted.

Budget deficits are caused by uncontrolled spending in relation to receipts.

Neither Bush or Kerry campaign want to address the issue which is a serious problem. The size of the deficit would be larger if you take out the excess of Social security funds.  What that means is that the Govt instead of saving the excess money collected for Social security is spending it. Are they concerned that when it comes time for you to collect that money will be there? By that time they will have retired and your children will be left to foot the bill for your social security or you will have to do without it

For those of you who love big Government, enjoy the spending now, because not much more is goign to come your way.

[stry_cat]

You must be logged in to read this quote.

Anyone know how high is the National Debt?  

Isn't it over $7 Trillion?!?

Am I the only one who thinks it is completely irresponsible for Bush and Kerry to allow us to grow the National Debt by $400 Billion a year?  

[A18]

We're at war. Bush plans to cut it in half.

I agree that we need to quit spending. I'm just saying, the Bush tax cuts have brought in MORE money to government. Same thing with Reagan; the government took in far greater revenue after the tax cuts, but spending skyrocketed as well.

[The Duke]

Budget deficits...

Inflation has got nothing to do with it... because both receipts and spending are inflation adjusted.

Budget deficits are caused by uncontrolled spending in relation to receipts.

Neither Bush or Kerry campaign want to address the issue which is a serious problem. The size of the deficit would be larger if you take out the excess of Social security funds.  What that means is that the Govt instead of saving the excess money collected for Social security is spending it. Are they concerned that when it comes time for you to collect that money will be there? By that time they will have retired and your children will be left to foot the bill for your social security or you will have to do without it

For those of you who love big Government, enjoy the spending now, because not much more is goign to come your way.

I didn't say inflation caused the deficit.  I said that, when adjusted for inflation, this is not biggest deficit ever.

[Fmr. Gov. NickG]

Where is the evidence that the Bush tax cuts have increased government revenue?

[Bogart]

While revenues have declined each year since 2000, they remain higher than all but one year of the previous administration.

http://www.cbo.gov/showdoc.cfm?index=1821&sequence=0#table1

[Gabu]

While revenues have declined each year since 2000, they remain higher than all but one year of the previous administration.

http://www.cbo.gov/showdoc.cfm?index=1821&sequence=0#table1

Is there a direct link between the tax cuts and the increased revenue or are they currently just two coinciding occurances?  It's a serious question; I honestly don't know.

[johngalt1234]

It is proven time and time again that the less you tax people the more economic activity you have resulting in greater tax revenues.

We saw the same with Reagan. However, Congress has a hard time controlling spending. It is nice when the taxpayer gives you a blank check to make you look and feel good.

[Fmr. Gov. NickG]

While revenues have declined each year since 2000, they remain higher than all but one year of the previous administration.

http://www.cbo.gov/showdoc.cfm?index=1821&sequence=0#table1

Isn't this fairly strong evidence that the tax cuts have have reduced revenue?  Especially in the face of the blatant logic of it?  Note that the strongest increases in revenue correspond with the higher taxes of the Clinton era, as opposed to the decline under Bush 43, and the very slow growth under Bush 41.

[Beet]

While revenues have declined each year since 2000, they remain higher than all but one year of the previous administration.

http://www.cbo.gov/showdoc.cfm?index=1821&sequence=0#table1

Isn't this fairly strong evidence that the tax cuts have have reduced revenue?  Especially in the face of the blatant logic of it?  Note that the strongest increases in revenue correspond with the higher taxes of the Clinton era, as opposed to the decline under Bush 43, and the very slow growth under Bush 41.

As a percentage of GDP, government revenue in 2003 was at its lowest point ever in CBO tables going back to 1962.

[A18]

... !!!

OF COURSE. A percentage of GDP doesn't mean anything.

All that says is what percentage of the nation's wealth the government is controlling. The country gets wealthier; 2% of 100 < 1% of 200,000,000.

[MN-Troy]

You must be logged in to read this quote.

Anyone know how high is the National Debt?  

Isn't it over $7 Trillion?!?

Am I the only one who thinks it is completely irresponsible for Bush and Kerry to allow us to grow the National Debt by $400 Billion a year?  

Yes the national debt is over $7 trillion dollars, but the U.S. economy produced over $11 trillion dollars in good and services. Most U.S. household would be thrilled to have indebtedness totaling just 60% of its income.

It maybe inresponsible for the government to add to the national debt on a year basis, but while the goverment sells bonds to fund its activities, it also sells bonds to you, me, insurance plans, mututal funds, and foreign entities. Those alone add to the national debt and much more so than a budgetary deficit.

[Bogart]

While revenues have declined each year since 2000, they remain higher than all but one year of the previous administration.

http://www.cbo.gov/showdoc.cfm?index=1821&sequence=0#table1

Isn't this fairly strong evidence that the tax cuts have have reduced revenue?  Especially in the face of the blatant logic of it?  Note that the strongest increases in revenue correspond with the higher taxes of the Clinton era, as opposed to the decline under Bush 43, and the very slow growth under Bush 41.

Actually, the only year of Clinton's administration that total revenues were higher than any year of Bush's was 1999.  And, % of GDP are comparable.  True, revenues have dropped, but so has economic growth in the short-term.