Is the US deficit dropping?

[King Coal]

A Republican friend just made that remark, is there any truth to that?

[Tandalayo_Scheisskopf]

1. One year event...

Thanks to some creative accounting and some tax ledgerdemane.

[Metta]

11. $200 billion off the books for the war

plus another almost $200 billion is social security borrowing and the like. Your friend is believing the lies sad to say.

[comsymp]

15. And that's one of their better financial tricks

Keeping Iraq totally off the books keeps the deficit "down" to, what, 350-360BB?

Good to have you here, Metta~

[wtmusic]

2. They trimmed $30B or so off the deficit for FY2005

Deficits don't "drop" per se. Tell your friend the national debt is "raising' to the tune of around $400B a year that his kid will have to pay interest on (unlike during the Clinton years, when we were actually paying off the national debt)

[LSK]

3. well if you do a lot of fuzzy math....

Like dont count supplimental war funding, hide debts by borrowing from Social Security and outright lie, then maybe the deficit is getting smaller.

But considering that we still have *, I would guess not.

[shoelace414]

4. its not as bad as originally forecast

[wli]

5. no, the current account deficit has gone up drastically

It went from something like 120 billion a year under Clinton to 635 billion a year under Bush.

[bahrbearian]

6. Good News instead of a $470 Billion Deficit this year .

We'll have a $360 billion Deficit so yes the deficit is dropping in speed but still growing.

[LiberalUprising]

7. Found this, Note the last sentence

WASHINGTON, DC - 09/10/04 - The US trade deficit fell almost 9% in July to $50.15 billion in July, according to figures released today by the US Department of Commerce (DOC).

Despite the fact that the drop in the deficit followed a 16.9% surge the previous month that had pushed the trade gap to a record $55 billion, the new figure ranks as the second highest monthly deficit imbalance on record.

http://www.caltradereport.com/eWebPages/front-page-1094910379.html

[wtmusic]

9. Trade deficit is a different animal

I believe OP is referring to the budget deficit

[jobycom]

8. A little, because Bush raised taxes

One of Bush's large corporate tax cuts had a limited life span, and just expired, so corporate taxes have gone up, thus reducing the deficit a tiny bit. The deficit it still immense, is not trending downward, won't be reduced next year, and is still adding to the largest debt in history.

Now, if Bush raises corporate taxes every year, he might get somewhere. Of course, that's what the Dems propose, and it looks like Bush has once again proven the Dems are right.

[BlueJazz]

10. Tell your Friend (?)....If your spouse goes out shopping.....

...and tells you when they get home that "I saved $200.00 on a new
<insert piece of garbage here>, do you feel like you just "came in to some money" ??

[Ravenseye]

12. Check out Krugman's OP-Ed

It might be a pay thing now on the NYT from July 11th.

Essentially the annual deficit DID drop from projections over 400 billion to about 360 billion. Keep in mind, it's not a surplus. We're still spending 360 billion more than we take in.

to Quote Krugman: "It turns out that all of the upside surprise in tax receipts is coming from two sources. One is tax payments from corporations, up both because last year corporate profits grew much more rapidly than the rest of the economy and because the effective tax rate on corporations went up when a temporary tax break, introduced in 2002, expired. Both are one-time events."

[klyon]

14. once again I would say they are playing word games

here's my logic

If this was projected or proposed deficit it didn't actually happen, then it can not be a reduction. Off budget stuff definitely cancels out any money saved somewhere else or from higher tax revenue than expected. The entire war is off budget. Their books are meaningless until rectified.

KL

[Bucky]

13. Wow, sinking into debt at a marginally slower rate. Hoo flippin ray.

The basic understructure of the American economy is pretty sound. It's moving sluggishly because of Bush's export of development capital thru his corporate tax cuts and removal of Clinton-style targeted tax cuts that encouraged job creation. But the engine of the American economy will refuse to stay sluggish for too long. Eventually the business cycle returns to true north.