Looks like another one of the left’s motifs has been destroyed:
U.S. Treasury Secretary John Snow said on Friday the U.S. budget deficit is shrinking faster than expected because of high tax revenues.
“It’s pretty clear now that the path we’re on will take us below the president’s initial target, that is below 2 percent of GDP and beyond that going forward,” Snow said at a press conference with Canadian Finance Minister Ralph Goodale.
The administration has pledged to achieve that goal by the time it leaves office in 2009.
“The outlook for the fiscal deficit for the next couple of years is excellent,” Snow said.
In addition to stronger-than-anticipated revenues due to a strong economy, spending constraints have also helped rein in the deficit, he said.
“Fortunately the last couple of years we’ve seen spending under control, too,” Snow said.
Of course they will never admit that Bush was right was right about the tax cuts. That is not surprising since its high school economics, a class that those on the left must of skipped. You cut taxes which stimulate spending which gives more money to the government….duh.
The Washington Times had this to say:
It’s embarrassing news for President Bush’s diehard Democratic critics, who predicted his tax cuts would worsen the budget deficits and drive the government deeper into debt. They argued throughout last year’s elections that the tax cuts failed to grow the economy, create jobs or improve fiscal health.
Surely, it has become quite clear they were wrong on all counts — again. Indeed, it now appears new tax-receipt numbers at the Treasury are showing a sharp increase in individual, corporate and Social Security payments.
Treasury officials say, thus far, in fiscal 2005, which began last Oct. 1, they have taken in nearly $100 billion more than previously projected. Individual tax receipts were up an impressive 21 percent over last year. Business tax revenues rose a whopping 48 percent. They took in a record $61 billion on June 15 alone.
“The numbers are an eye-popping vindication of the Laffer curve [a theoretical correlation between tax rates and growth] and the Bush tax cut’s real economic value,” tax-cut crusader Stephen Moore wrote in the Wall Street Journal.
What this means is that, despite somewhat higher spending, “The federal deficit could come in at $325 billion to $350 billion, significantly better than the White House $427 billion projection, or the Congressional Budget Office’s $400 billion forecast,” writes The Washington Post’s economics reporter Jonathan Weisman.
Some fiscal experts now predict the deficit could come in at around $300 billion. My own belief is it will be even lower because the economy is growing much faster than expected. Last week, the U.S. Commerce Department reported that, for the first three months of the year, the economy was growing at an annualized 3.8 percent, instead of the 31/2 percent they initially reported. This revised estimate, in the face of Wall Street fears of economic slowing, provided “more ammunition for Republican boasts that their tax cuts are the cause of this performance,” Mr. Weisman reported.
Quite funny. Why don’t we pile on a bit more with this report that the unemployment rate has fallen once again:
The U.S. unemployment rate fell to 4-year low of 5% in June as the economy added 146,000 payroll jobs, the Labor Department said Friday.
Yeah, sure looks like our economy is going to hell.
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