BOTTOM LINE: The US recorded a budget deficit of $248 billion in the fiscal year ended Sept. 30, $48 billion less than the government predicted in August, Bloomberg reported. Revenue to the US Treasury rose 12% from the prior year, mainly due to a 27% surge in corporate income taxes. This is a direct result of the greatest streak of double-digit profit growth gains in US history. The smaller deficit is evidence that “pro-growth policies work,” President Bush said at a press conference today. President Bush met his goal of cutting the deficit in half three years ahead of schedule. Lower individual tax rates increase economic growth, which in turn boosts government tax receipts and helps lower the US budget deficit. A booming housing market, strong stock market and healthy job market have all substantially boosted government tax receipts. The Treasury on Sept. 15 took in an all-time record $85.8 billion in taxes, including a one-day record $71.8 billion in corporate taxes. The US budget deficit as a percentage of GDP is now 1.9%, below the 40-year average of 2.3%.
Wednesday, October 11, 2006
US Budget Deficit as Percentage of GDP Now Below 40-year Average
- The US budget deficit came in at $248 billion in the fiscal year ended Sept. 30 versus prior estimates of $296 billion.
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Wow, those were the days ...
Now we really need to roll up our sleeves and fix the budget. We should roll back taxation and spending to fiscal year 2000 levels as a percentage of GDP. That would get us back to surplus, but it would probably take several years to get to that level without wrecking the economy.
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