Friday, September 29, 2006

Hard To Fool The Bank

Hey our bottom line would look better too if we didn't have to include all our liabilities. Even so, ending up $260 billion in the hole is not much to write home about. McClatchy (09.28.06):
"The U.S. government closes the books on fiscal 2006 Saturday, and politicians are likely to trumpet that the federal deficit came in almost $60 billion below projections. Problem is, they won't be using the same math you use. The nonpartisan Congressional Budget Office has projected that the federal deficit for the fiscal year ending Sept. 30 will total around $260 billion, aided by a surge in revenues. That's $58 billion lower than last year's deficit and about $77 billion lower than projections at the beginning of the fiscal year." Deficit comes in below projections, thanks to 'off-budget' borrowing
"Great news? Budget experts in Washington and on Wall Street say it's a welcome development, but misleading. Washington's funny math excludes the Social Security trust fund, which is running a $177 billion surplus this year. Washington spends it, but doesn't count it as spending. It's officially listed as 'off-budget' borrowing." "So the deficit is actually about $437 billion, the CBO calculates: the $260 billion official deficit plus the $177 billion borrowed from the trust fund. Since the money is 'borrowed,' it adds to the gross federal debt, which is expected to reach about $8.5 trillion by Jan. 1. "This is why New York investment bank Goldman Sachs & Co. issued a dour report Sept. 22 titled 'The U.S. Budget Outlook: No Lasting Improvement.'" But (via ThinkProgress) look at the stock market. George's tax cuts really helped push the Dow up, right? Well, yes and no. Yes if you believe George and Fox News. No if you believe Federal Reserve Board economists ("the tax cut...was a dud when it came to boosting the stock market..."). You make the call.


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