Wednesday, October 11, 2006


The White House is boasting that the federal budget deficit is half what it was in a 2004 estimate. The deficit is, indeed, smaller and tax revenues have, indeed, gone up a fair amount. But Dave Wessel, who writes for that radical left-wing publication The Wall Street Journal, told Steve Inskeep of NPR this morning that things didn't happen exactly the way the administration would like you to believe they happened:

INSKEEP: Is the president right that tax cuts have led to that increase in receipts as the economy is stimulated?

WESSEL: ... a lot of the increase in taxes is coming from tax rates that he didn't cut, and it's hard to see this evidence, in my opinion, as supporting the thesis that if you cut taxes you get more revenue, so you should always cut taxes. As you remember, the president mostly cut individual income taxes, but the real surge has been in corporate profits. Measured against the size of the economy, corporate tax receipts in the just-ended fiscal year are bigger that any time since 1978.

INSKEEP: So corporations are paying more?

WESSEL: Corporations are paying more because they are making so much money.

INSKEEP: The gigantic profits of someplace like Exxon means more tax receipts for the federal government.

WESSEL: Absolutely.

So what can we conclude from this? Simply this: that screwing up every aspect of U.S. foreign policy, especially with regard to the Middle East, wasn't a Bush administration failure -- it was a plan. The Bushies meant to do this. They meant to leave the door open for an anti-Semite in Iran to pursue his nuclear ambitions. They meant to turn Iraq into hell on earth rather than a successful oil exporter. What should they have done instead -- tried to secure peace? If they'd done that, oil wouldn't have gone to $70+ a barrel, the energy companies' profits wouldn't have skyrocketed -- and the deficit would be much bigger!

My God, it's brilliant!


Supplementary reading: "Doubts Over Bush Claim to Have Halved Debt," from that other radical lefty rag, The Financial Times:

...Some economists ... warned that 2006 could mark a low in budget deficits before rising next year.

James Horney, senior fellow at the Center on Budget and Policy Priorities, said the new forcast was a "blip in a bleak fiscal outlook", and that the administration did not deserve "any credit" for halving the deficit.

He suggested the goal had been set using an inflated figure for the 2004 deficit of $521bn, not the lower forecast from the Congressional Budget Office of $477bn to make it "easier to meet the goal"....

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