Re(2): 'Dubya's New Plan to Balance the U.S. Budget', The Daily Reckoning, Ian Mathias
Howdy Folks - all five readers. The above link doesn't exist yet. It will magically appear tomorrow. Will it tell a story tomorrow that is better or worse than what follows...
But, with lots of caveats...
It is rather dumb to predict Federal spending with two months of data. So these numbers shouldn't be used when debating some Lib. Next months numbers will provide enough data to whack-a-mole a Lib or two and win some bets.
However, here is one recent bet I made and won: President Bush promised to cut the deficit in half by FY2009 (his last budget). He made that promise using the CBO FY2004 estimate of a $512 Billion dollar deficit. The media scoffed, the Dems wailed... 1/2 of $512 Billion is $256 Billion. Last years deficit was $247 Billion. He wins, I win. At least I got a decent lunch out of it. What did Bush get for being right and being early. Nada.
Now for this year (FY2007).
Right now we are running a $124 Billion deficit - a 4.31% reduction from last year. Revenues are up 8.75% while spending is up a mere 4.74%.
The interesting factoid is that the Gubmint is running without a budget and cannot exceed last years spending by more than inflation. What does that mean in the greater scheme of things.
- We might hold spending to a 4% increase
- Even that spending might be reduced because of gridlock
- And, we will not be funding Katrina (already paid for last year)
- And who knows about the annual $100 Billion military supplemental
Thus, we are looking at FY2007 1st Qtr (2006/12) numbers as follows:
- Receipts: $588,533 Million
- Outlays: $669,004 Million
- Deficit: $ 80,471 Million
With those numbers we are looking at annual FY2007 numbers as follows:
- Receipts: $2,671,409 Million
- Outlays: $2,734,524 Million
- Deficit: $ 63,115 Million
Our GDP will be about $13,000,000 Million
The deficit will consume 0.49% of GDP
The deficit will be 2.3% of spending
And, the budget will be in surplus in FY2008 - just in time for the Presidential Elections!!!
Rosy... Me thinks not. The worse case scenario (not including acts of God and the like) would result in an FY2007 deficit of $145 Billion. Basically, the growing economy and the minimal spending restraint shown by the Pigs in the Trough lop off about $100 Billion a year in the defict. Thus, by FY2009 we are looking at a surplus of between $50 Billion and $130 Billion...
Quite a Legacy, eh...