Linkmeister

As the Wall Street Journal editorialized today, "revenues as a share of the economy are now expected to rise this year to 18.3%, slightly above the modern historical average of 18.2%. The remaining budget deficit of a little under $300 billion will be about 2.3% of GDP, which is smaller than in 17 of the previous 25 years. Throw in the surpluses rolling into the states, and the overall U.S. "fiscal deficit" is now economically trivial."

Posted by: pixelshim at July 12, 2006 01:22 AM

The WSJ editorial pages are shills for the Administration and for laughable theories like supply-side economics. Paul Gigot has become increasingly shrill as Iraq has gone down the tubes and the economy has become more and more unequal. Remember "lucky duckies?"

It's amusing that that 2.3% number is the one Bush used in his speech yesterday; who wrote it first, Bush's speechwriters or Gigot and his bunch of lackeys?

The WSJ news pages are admirable.

Posted by: Linkmeister at July 12, 2006 08:19 AM

Oh, and these clowns have made an art of high-balling their estimates in spring in order to make themselves look better in the summer. In February they estimated the deficit as $423B; magically it's now only $296B.

Gosh, those new tax receipts add up to $127B! I don't think so.

Posted by: Linkmeister at July 12, 2006 09:24 AM

shills

sorry Link, but name-calling and stereotyping is a lazy way to avoid rational discussion.

The fact is that rapid growth in Federal, State and local tax revenues have indeed exceeded most forecasts, and it does reflect real changes in the economy's performance.

The above statement is not intended to justify the irresponsible orgy of spending foisted on us by politicians of both stripes. Nor does it attach any legitimacy to the spin machines of Democrats or Republicans, in or out of power.

Rather, it reflects the fact that the tax system is still quite progressive. It is undisputed that the wealthy have enjoyed a disproportionate share of the growth in national income, and to see tax revenues rise along with their fortunes is to be expected.

One can call for policies that bring about more progressivity to the tax system. Or not. Either path is a legitimate one to advocate.

Presently, however, the nation has a tax system that overwhelmingly relies upon the well-off to provide the bulk of personal tax revenues. One should keep that in mind when designing future incentives ( and disincentives) to the system. Marginal changes always have an effect.

I was in a discussion some weeks ago about how the huge losses incurred from the stock-market collapse four years ago made it inevitable that revenues would fall, and that the recovery would take time. Since the bubble burst, however, federal spending did not decline, but rather accelerated.

Irrespective on what one thinks about how the spending was allocated. Federal spending was supported by large majorities on both sides of the aisle.

But the fact that revenues have exceeded expectations reflect some good news about economic performance. It has been an uneven recovery, for sure, but it has been one that happened simulataneous to unprecedented challenges (9-11, Katrina, energy shocks, etc.)

In my opinion, the MSM's focus upon the budget spiining rather than the underlying economics was irresponsible.

Posted by: pixelshim at July 13, 2006 02:48 AM

Here's the latest example of the Journal editorial page's hackery. Consult with the paper's own reporter before sliming the NYT about publishing the same story? Nah, that would be fact-checking; no need.

As to the economy, when the middle class and poor start feeling like they're making headway against a tide that increasingly looks like it's stacked against them, then I'll cheer.

Posted by: Linkmeister at July 13, 2006 10:03 AM

"when the middle class and poor start feeling like they're making headway against a tide that increasingly looks like it's stacked against them, then I'll cheer."

On this we agree.

:)

Posted by: pixelshim at July 13, 2006 11:43 AM

The linked NY Ovserver artiicle inclded: "The wall between news and opinion has traditionally been a tall and sturdy one at The Journal ..."

I, for one, think that such a wall is a good thing at newpapers ( and other MSM). Publishers and their editorial staffs can and should take stands, advocate policy, and be partisan. The new staffs, on the other hand, should invesitigate and report the facts as they fall, without the architecture of a partisan world-view.

Hmm . . I wonder if the news staffs at The Observer, the Times, or other MSM even try to meet that goal, expecially when contentious issues in play.

Posted by: pixelshim at July 13, 2006 11:52 AM