The Lincoln Plawg - the blog with footnotes

Politics and law from a British perspective (hence Politics LAW BloG): ''People who like this sort of thing...'' as the Great Man said

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Thursday, September 09, 2004

That deficit

An area where this angel generally fears to tread.

Off the CBO's report on the dire fiscal state - 3.6% of GDP in a relatively buoyant economy is bad, m'kay, surely? - and Greenspan's Jeremiad, the New York Times piece (hed Deficit Analysis and Bush Differ) has some analysis.

I was struck by this little nugget:
"When the Bush administration took office in 2001, C.B.O. projected a $397 billion surplus for 2004," said Representative John M. Spratt Jr. of South Carolina, the senior Democrat on the House Budget Committee. "Under the fiscal policies of this administration, the bottom line of the budget has worsened by $819 billion in 2004 alone."

Now, I seem to recall that Kerry's budget plans are aimed to redistribute spending (withdrawing tax cuts for the rich to pay for expanded health spending), not to reduce the deficit by any appreciable amount.

Quick question: is a return to fiscal sanity more likely with a battered second-term Bush at the helm, or a mandate-proud Kerry?


We have an artefact problem with these numbers (probably umpteen artefact problems, but...):
oth Mr. Bush and Mr. Kerry have promised to cut the budget deficit in half over the next four or five years. But many budget analysts say that five-year goals simply distract attention from much bigger fiscal problems that are expected in the years that immediately follow.

Several of Mr. Bush's tax cuts do not take full effect until 2010. The new Medicare prescription drug program, which is now expected to cost $534 billion over 10 years, will not really get under way until 2006 and will become more expensive each year after that as the number of elderly beneficiaries rises.


A piece - in the neocons' house mag the National Review, of all places - points out that the real Federal financial hole, including the present value of liabilities under social security and Medicare laws, are much, much worse than the bald deficit numbers: an NPV of $45 trillion for those two heads of liability.

A little perspective for Bush and Kerry's claims to reduce the deficit by half in five years.

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