Disappearing deficit

Friday, July 15, 2005

Why is it that the dreaded federal budget deficit only commands screaming headlines when it's rising, not falling? And why is it that the deficit is portrayed as a fire-breathing, hydra-headed monster only when the press can portray the villain as "irresponsible tax cuts," not runaway federal spending? We ask these questions in the wake of the great unreported fiscal story of 2005: the shrinking federal deficit. It's down by at least $100 billion because federal tax receipts have skyrocketed this year by 14.6 percent (or $204 billion) through June. Private economic forecasters now believe the budget deficit may come in at about 2.5 percent of GDP, which is in line with the historical average for the past 40 years. Given that we're fighting an expensive, must-win war on terror, these deficit numbers aren't too shabby.

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