These Numbers are Staggering
Tuesday, July 11th, 2006The NY Times reports on the release of the White House midsession budget review, normally a obscure wonk-fest, which Mr. Bush is trying to turn into a coup:
But President Bush plans to preside today, with members of Congress and invited guests in attendance. By all indications, including his own in his weekly radio address last Saturday, he plans to turn this into a celebration — just in time for the fall campaign.
This is proof, if anyone still needs it, that this administration is desperate for something to boast about. On Mr. Bush’s watch, triple-digit budget surpluses have turned into annual triple-digit budget deficits. There’s no information in the midsession report to alter that utterly dispiriting fact. Yes, the report is expected to project that this year’s deficit will be somewhat less gargantuan than last year’s — probably somewhere between $280 billion and $300 billion, versus a $318 billion shortfall in 2005. That’s not much to crow about.
But Mr. Bush is likely to gloat, anyway. Earlier this year, the administration conveniently projected a highly inflated deficit of $423 billion. With that as a starting point, the actual results can be spun to look as if they’re worth cheering.
The razzle-dazzle won’t end there. As he did in his remarks on Saturday, Mr. Bush is sure to use today’s event to credit tax cuts for a projected “surge” in tax revenue. The Treasury is expected to take in about $250 billion more in 2006 than in 2005, for a total take of $2.4 trillion. Devoid of context, the number looks impressive.
In fact, it is $100 billion less than the $2.5 trillion revenue estimate the administration touted when it set out in 2001 to sell its policy of never-ending tax cuts. Even with this year’s bigger haul, real revenue growth during the Bush years will be abysmal, averaging about 0.3 percent per capita, versus an average of nearly 10 percent in all previous post-World War II business cycles. That might be excusable if the recent revenue improvements could reasonably be expected to continue. They cannot. Much of the increase in tax receipts is from corporate profits, high-income investors and super high-earning executives, sources that are just as unpredictable as the financial markets to which they’re inevitably linked.
A deficit of $280 Billion. My wife and I, thoroughly middle-class and struggling, each make about $40K per year. For the sake of illustration, if we assume this to be an average salary for an average American worker, then our tax-cut-happy administration is loosing the combined salaries of 7 million people each year! To further the analogy, if we equate the nation's expected intake of $2.4 trillion with my family's $80,000, then we can also equate the nation's projected loss of $280 billion to a theoretic family loss of of over $6800 per year. How long would my creditors put up with that kind of budgeting?
Since the projected shortfall is less than expected, we can expect pomp and fanfare. the reality is that the President's "surge" is only a lessening of losses. Notwithstanding the views of Right Blogistan, the administration is grasping at straws to find something to crow about. In a dark room, even a lit match can seem bright.