Monday, October 17, 2005
2005 deficit down over 22%, better than Europe and Japan
USA Today reports on the federal government’s deficit figures for the 2005 fiscal year, which ended September 30. As I have previously reported, increased tax revenues resulting from the tax cut-fueled economic expansion (growth rate at around 4%) has resulted in a huge increase in tax revenues collected by the government.. The result is that the deficit has dropped nearly 23% in one year, leaving the US with a lower deficit rate than western European nations or Japan.
So why do so many on the left and in the mainstream media continue to talk about the economy in negative terms and harp on “skyrocketing” deficits? Because that’s what the agenda calls for, no matter what the actual facts may be.
WASHINGTON — The federal deficit hit $319 billion for the budget year that just ended, down significantly from last year's record red ink, although a surge in Katrina-driven spending promises to drive the shortfall up again.
The improvement from the record $412 billion recorded in the 2004 budget year, which the Treasury Department reported on Friday, is largely due to a surge in federal revenues from an improving economy.
Although the 2005 shortfall was the third-highest ever recorded in absolute terms, White House officials -- and most economists -- say the most important measure of the deficit is its size compared to the economy.
In those terms, the deficit measured 2.6% of gross domestic product. The 2004 deficit, by contrast, equaled 3.6% of GDP. That is well below the post-World War II worst-ever record, a 6% figure set in 1983 under President Reagan.
It is also lower than the government budget deficits for many industrialized countries. Although the European Union officially requires its members to keep deficits at 3% or lower, France, Germany and the United Kingdom currently run government budget deficits exceeding that goal, while Italy's budget deficit tops 4%. Japan's budget deficit averaged almost 6% from 1994 to 2003 and now approaches 7%.
So deficits are not skyrocketing, our deficit compares very favorably with other major industrialized nations, and, best of all, these are real figures for the past year, not imaginary numbers. You would think all this economic good news would be big news, front page news, tv newscast lead story news.
Well, you would think so, if the goal of the news organizations was to actually report news.
UPDATE: Welcome WIZBANGERS, and a big "thanks" to Kevin for the link. Previous posts regarding the increase in tax revenues, decrease in the deficit, and slowdown in the rate of goverment spending in 2005 can be found here and here.
So why do so many on the left and in the mainstream media continue to talk about the economy in negative terms and harp on “skyrocketing” deficits? Because that’s what the agenda calls for, no matter what the actual facts may be.
WASHINGTON — The federal deficit hit $319 billion for the budget year that just ended, down significantly from last year's record red ink, although a surge in Katrina-driven spending promises to drive the shortfall up again.
The improvement from the record $412 billion recorded in the 2004 budget year, which the Treasury Department reported on Friday, is largely due to a surge in federal revenues from an improving economy.
Although the 2005 shortfall was the third-highest ever recorded in absolute terms, White House officials -- and most economists -- say the most important measure of the deficit is its size compared to the economy.
In those terms, the deficit measured 2.6% of gross domestic product. The 2004 deficit, by contrast, equaled 3.6% of GDP. That is well below the post-World War II worst-ever record, a 6% figure set in 1983 under President Reagan.
It is also lower than the government budget deficits for many industrialized countries. Although the European Union officially requires its members to keep deficits at 3% or lower, France, Germany and the United Kingdom currently run government budget deficits exceeding that goal, while Italy's budget deficit tops 4%. Japan's budget deficit averaged almost 6% from 1994 to 2003 and now approaches 7%.
So deficits are not skyrocketing, our deficit compares very favorably with other major industrialized nations, and, best of all, these are real figures for the past year, not imaginary numbers. You would think all this economic good news would be big news, front page news, tv newscast lead story news.
Well, you would think so, if the goal of the news organizations was to actually report news.
UPDATE: Welcome WIZBANGERS, and a big "thanks" to Kevin for the link. Previous posts regarding the increase in tax revenues, decrease in the deficit, and slowdown in the rate of goverment spending in 2005 can be found here and here.
Subscribe to Posts [Atom]