The Bush Administration has revised their estimate of this year’s budget deficit from $423 billion down to $296 billion and they’re all giddy as school girls about it:
President George W. Bush and Republicans in Congress likely will point to the decline as they argue that tax cuts enacted in Bush’s first term are benefiting the economy and are a reason for voters to maintain the party’s majorities in the House and Senate in the November elections.
Never mind the fact that it’s still the fourth biggest deficit ever or that, as the folks at Think Progress point out, it should’ve been a surplus:
When President Bush came into office, he inherited a surplus of $284 Billion. At that time, the Bush administration predicted a $516 billion surplus for 2006.
The fact that Bush now considers a $296 billion deficit an occasion to celebrate shows how far we’ve fallen.
Almost hard to recall we once had a budget surplus. With a Democrat in the White House who had a Republican controlled Congress to deal with no less. It’s amazing how quickly the Republicans managed to wipe that out and rack up record deficits once they got in charge, eh?
Oh, by the way, Bloomberg is also reporting that rising interest rates and high gas prices are probably going to weaken the economy through the rest of the year:
Federal Reserve policy makers will now need to raise their target rate again this quarter and hold it there for the rest of 2006 to prevent this year’s 35 percent jump in gasoline costs from stoking inflation, according to the survey. A cooler housing market will add to the list of consumer woes.
“With the Federal Reserve being pretty forthcoming in saying their priority is to fight inflation, there is a good chance that they will continue to raise rates despite the fact that the growth indicators will slow,’’ said Sharon Lee Stark, chief fixed-income strategist in Baltimore for Stifel Nicolaus & Co., an institutional brokerage firm. Stark, who this month raised her interest rate forecast, said inflation “will continue to be elevated.’‘
Growth last quarter cooled to 2.8 percent, half the first quarter’s pace, and down from June’s 3 percent forecast, the survey also showed. Three consecutive quarters of less than 3 percent growth would be the weakest since the nine months ended in March 2003.
Yet Bush thinks his tax cuts have done the trick! Denial is more than a river in Egypt.