Received today from my friend Dan Clifton, a new report from Steve Moore’s guys at the Club for Growth.
Deficit $115 Billion Lower Since May 2003 Tax Cut
Congressional Budget Office (CBO) estimates for January tax and spending numbers shows the federal government incurred a $41 billion surplus in the month of January. Accordingly, the 12-month budget deficit has dropped to $188 billion, the lowest level since September 2002. The year over year deficit is now down by 38.6 percent – the second consecutive month of a 30 percent reduction. The year over year deficit has now declined by 18 percent or more for 22 consecutive months. Interestingly, the employment numbers have been revised upward by 40 percent for the same consecutive 22 months which is driving higher income tax revenues. Hmmm.
In the past 24 months the deficit has declined $201 billion (51.6%).
The CBO’s most recent estimate is that the deficit will fall in the $200 billion range, based on tax revenues growing 5.6 percent for this fiscal year. But over the first four months of the fiscal year, tax revenues are up 9 percent compared to the same period last fiscal year,and lately tax revenues have accelerated in the February through May period due to the surge in non-wage income from capital gains, dividends, and small business income. If tax revenues increase 9 percent this year he deficit will likely finish the fiscal year at $150 billion, roughly 1 percent of GDP.
And remember, all this has happened while both Republicans and Democrats in Congress have been ladling out the earmarked pork and the President has been searching for the Holy Grail in the middle east. Imagine if we has even a teaspoon of spending discipline!
Growth is the only budget policy that ever works.