Shrinking Deficit

The Washington Times: Commentary:

Here's one story you won't find on tomorrow's front pages: 'The U.S. budget deficit is shrinking rapidly.' The headline would be accurate, but the mainstream media are much more interested in talking down this booming economy than telling it like it is. Last week's Treasury report on U.S. finances for December shows a year-to-date fiscal 2005 deficit already $11 billion less than last year's. In the first three months of the fiscal year that began last October, federal cash outlays rose 6.1 percent and tax collections grew 10.5 percent. When more money comes in than goes out, the deficit shrinks. At this pace, the 2005 deficit is on track to drop to $355 billion from $413 billion in fiscal 2004. As a fraction of projected gross domestic product, the new-year deficit will fall to 2.9 percent, compared with last year's 3.6 percent. Wire reports are loaded these days with accounts of an expanded trade gap (driven mostly by slower exports to stagnant European and Japanese economies, along with higher oil imports due to the energy price peak). But not a report I can find mentions the sizable narrowing in U.S. fiscal accounts. Behind this really big budget story is the even-bigger story: The explosion in tax revenues has been prompted by the tax-cut-led economic growth of the last 18 months.

Sounds like a win for the Bush tax cuts to me.