Naturalized-Texan
07-12-2006, 11:22 AM
We Can’t Keep Spending Like This (http://article.nationalreview.com/?q=NzFjOTE5N2E2NjE5MzUxN2IxNGFjYjE4ODUzN2VlZGQ=)
On Tuesday, President Bush announced that the federal budget deficit will be $100 billion lower than initially expected due to higher levels of economic growth. This is the third consecutive year substantial downward revisions were made to the deficit as part of the administration’s mid-year budget review. The president further claimed that the nation is ahead of schedule by one year in its goal to cut the budget deficit in half.
On the surface this appears to be good news. Yet the biggest mistake the conservative movement could make is to focus on the budget deficit. The deficit is an unimportant number that reflects two very important numbers: how much the government takes in taxes and how much the government spends. Fixing a deficit “problem” can be achieved by raising taxes or by cutting spending — and raising taxes is always the establishment-approved solution.
The downward reduction in the deficit is being driven entirely by strong economic growth which is increasing tax revenues. Growth should be valued and growth is happening. The president and Congress have cut taxes each year and the large reductions on double taxation of savings and investment has led to unprecedented growth and hence higher tax revenues.
But growth is just one part of the equation. Total federal spending, which is accelerating at an unsustainable level, is the other half of the equation, and is currently being masked by the reduction in the budget deficit.
{More at the link above.}
On Tuesday, President Bush announced that the federal budget deficit will be $100 billion lower than initially expected due to higher levels of economic growth. This is the third consecutive year substantial downward revisions were made to the deficit as part of the administration’s mid-year budget review. The president further claimed that the nation is ahead of schedule by one year in its goal to cut the budget deficit in half.
On the surface this appears to be good news. Yet the biggest mistake the conservative movement could make is to focus on the budget deficit. The deficit is an unimportant number that reflects two very important numbers: how much the government takes in taxes and how much the government spends. Fixing a deficit “problem” can be achieved by raising taxes or by cutting spending — and raising taxes is always the establishment-approved solution.
The downward reduction in the deficit is being driven entirely by strong economic growth which is increasing tax revenues. Growth should be valued and growth is happening. The president and Congress have cut taxes each year and the large reductions on double taxation of savings and investment has led to unprecedented growth and hence higher tax revenues.
But growth is just one part of the equation. Total federal spending, which is accelerating at an unsustainable level, is the other half of the equation, and is currently being masked by the reduction in the budget deficit.
{More at the link above.}