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POLITICS: White House To Release Report Projecting Record Deficit

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posted on Jul, 27 2004 @ 09:26 PM
Within the next few days, the White House is expected to report a budget deficit of approximately $420 billion dollars. However much this seems, it is about $100 billion less than was originally expected. Republicans cite this fact as a victory for Bush because one of the plans of the current president is to cut that deficit in half within the next five years. Democrats however are saying Bill Clinton was projecting a $400 billion surplus at this point four years ago.
WASHINGTON (Reuters) - The White House is expected to project soon a record federal budget deficit of about $420 billion for 2004, which could give ammunition to both sides of the election-year debate over tax and spending policies.

Congressional sources said on Tuesday the White House review of the current fiscal year, which ends Sept. 30, was likely to project a deficit about $50 billion greater than 2003. But the new figure would be nearly $100 billion less than forecast five months ago.

Please visit the link provided for the complete story.

While Democrats and Republicans are at odds on who is victorious in dealing with this number, this leaves everyone else wondering why spending $400 billion more than you planned to is a good thing.

This is a clear example that you can't have "guns and butter," we can't fight a war and give tax cuts, you can't fight terrorism and build our economy. This budget deficit will continue exist while we do those things.

I, personally don't think we should abandon building our economy, and if the war on terror is legitimate then we shouldn't stop that either. The only option left is to cut back the size of the government, but what official is going to vote to get rid of his own job?

[edit on 7/27/2004 by lockheed]

[edit on 28-7-2004 by Zion Mainframe]

posted on Oct, 18 2004 @ 11:39 AM
A lot of the people behind the last several posts seem to me to be, consciously or unconsciously, advocating what is known as Reagonomics. Simply put, Reagonomics is based on what is known as the 'trickle-down' theory, where the gov't gives big tax cuts to industry and business, fallaciously assuming that these economic benefits to the rich will somehow 'trickle-down' to the poor. This is what both Bushes have tried. Please refer to Murcielago's excellent graphs above to see the results, noting in particular the blue section, where the deficit became a surplus, and then the pink section, where this trend was sharply reversed, from the highest surplus in US history in 2000to the largest deficit in US history in 2003. Also note the exponential-like curve displayed in 'National Debt from 1940 to Present', where the upward slope increases during the reagon/bush/bush.jr years, and started to level off during the Clinton years. Please view the following links to get a better idea of this brand of economics currently practiced by the US gov't.

Originally posted by edsinger
It is called, instead of getting paid $10 an hour at a factory, I go into debt ex. school, to better myself, then get the $30 an hour job and pay back the debt with my much higher purchasing hard to understand?

Yes, edsinger has good advice here, but the analogy is poor, because this is not what the US gov't is doing. Imagine, instead, if you will, this scenario:

I make $10/hr at a factory. I decide this doesn't cut it, and go into debt to go back to school. After 4 years of training, I now decide to return to work at the local fast-food restaurant for $6.50/hr. I am now making less money, plus I have to pay back all my debt. Not only have I foolishly cut my source of revenue, I have increased my expenditures (deficit in the form of interest payments) as well.

And now this scenario:

The government collects X dollars through tax revenues. They decide this doesn't cut it, and slash taxes for industry and business (the main recipients of Bush Jr. tax cuts). Not only that, they decide to increase spending at the same time. (this would be analogous to me buying a car and house during my previous hypothetical scenario) Now the US gov't is in the unenviable position of trying to pay off an increasing deficit, while simultaneously diverting financial resources to other concerns, and to top it all off, they have less money to do it all with.

Fiscal spending for 2005:

Fiscal spending for 2000: (Clinton's last year)
original source:

Item 1. Social Security 22%.
Item 2. Net Interest 11%.
Item 3. Medicare 11%.
Item 4. Medicaid 6%.
Item 5. Other Mandatory 6%.
Item 6. Other Means-tested entitlements 6% (Footnote: Means-tested entitlements are those for which eligibility is based on income. The Medicaid program is also a means-tested entitlement.)
Item 7. Reserve pending Social Security reform 6%.
Item 8. Non-defense discretionary 17%.
Item 9. National defense 15%.

Tabular Information on the last 57 years of gov't spending
-noting in particular net lending/borrowing, which is highest during years in which Reagonomics was practiced


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