DAILY BEAST Column: ….While the national debt mounts, I’ve noted that the primary deficit—the annual mismatch between revenues and expenditures—is melting away. Check out the March Treasury Monthly Statement, which was released Wednesday. In March 2013, the government collected $186 billion in revenues and spent $292.5 billion, for a deficit of about $106 billion. Pretty bad. But in March 2012, revenues were substantially lower and spending was significantly higher. Then, revenues were $171.2 billion and spending was $369.37 billion, for a deficit of $198 billion. From last March to this March, revenues rose 8 percent while spending fell 21 percent, and the monthly deficit shrank 46 percent.
Now, monthly numbers can move around—if a big tax payment comes in on March 31 one year and arrives on April 1 the next year, or if a benefits payment that went out on March 1, 2012, instead went out on Feb. 28, 2013. So it’s useful to look at the trend. The fiscal year is now six months old. And guess what? It shows more deficit melting. Through the first six months of this fiscal year, revenues are $1.196 trillion, up 12.5 percent from $1.063 trillion in the first six months of fiscal 2012. Meanwhile, the government has spent $1.797 trillion in the first six months of fiscal 2013, down 2.4 percent compared with the first six months of fiscal 2012. The deficit for the first half of the fiscal year is $600.5 billion, down 22.5 percent from $775 billion in the first half of fiscal 2012.
And in theory, there’s more to come. The budget Obama presented, which is naturally dead on arrival, continues the spending restraint. Next year it projects spending will rise 2.5 percent. It aims to increase revenues by doing things like getting rid of the absurd carried-interest tax break for private equity and hedge-fund managers. Should all the proposals become law, the administration projects revenues will rise nearly 12 percent in fiscal 2014, leaving a deficit of $744 billion… (more)
EDITOR: Instead of pumping up the economy through increased deficit spending, tax and spending policy has taken the air out of any incipient recovery. This is the reason for the flatness of the economy and the continued very high unemployment and underemployment. The Conservative government in England went even further in foolish attempt to reduce deficits during a steep recession. The result was totally predicable – the same we experience in 1936; the economy is in steep decline.
Had we accepted the ‘job bills’ that Presidenet Obama and almost all reputable economists had urged, we would soon be putting the recession behind us and once again generating fiscal surpluses, as we did during the latter Clinton years and before “W” ran wild with the nation’s credit card.
Once again, ideology trumps knowledge.
