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NOYB wrote:
Tuesday, July 12, 2005

U.S. Budget Deficit Narrowing Quickly On Revenue Surge
BY JED GRAHAM

INVESTOR'S BUSINESS DAILY

So much for record budget deficits. The tide of economic growth and
surging
corporate and individual tax revenues are now expected to erase as much
as
25% of the red ink the government was planning to expend this year.

Three-quarters of the way through fiscal 2005, the Congressional Budget
Office says the deficit will come in well shy of $350 billion and may
fall
below $325 billion. The White House, which had forecast a record $427
deficit, will update its view Wednesday.

Some see the better-than-expected federal revenues as evidence that
President Bush's tax policy is working as advertised.

"This is exactly what the White House said would happen," said Heritage
Foundation budget expert Brian Riedl. "They said the tax cuts would
stimulate productivity, fuel economic growth and lead to smaller
deficits."


Tax revenues through the first nine months of the fiscal year are up $204
billion, or 14.6%, from last year to $1.6 trillion, CBO estimated.

More than one-fourth of that improvement has come from corporate income
tax
receipts, which are up $58 billion, or 40.8%, from a year ago.

Individual income taxes are up $105 billion, or 17.6%, from last year.
The
payroll taxes that fund social insurance programs are up $34 billion, or
7%.

"It's a dramatic story," said Greg Valliere, chief political strategist
at
Stanford Washington Research Group. "Whether you believe in supply-side
theory or not, supply-side-tax-cutting advocates are going to be
emboldened."

Valliere now expects the president to reach two years early his "modest"
pledge of cutting the deficit in half as a share of GDP by 2009.

Bush made the commitment during his bid for re-election at a time the
White
House was projecting a deficit of 4.5% of GDP, although the 2004 deficit
ended up to be $412 billion, or 3.6% of GDP. CBO figures suggest the 2005
deficit may slip below 3% of GDP.

For an administration that had to deflect attacks about being fiscally
irresponsible in Bush's first term, the turn in the deficit is welcome
news,
and the stakes couldn't be any higher. Closing the deficit is critical to
the president's goal of making his first-term tax cuts permanent and
cementing his legacy as a tax cutter.

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Well what do you know! JFK was right when he said "it is a paradoxical
truth that tax rates are too high today and tax revenues are too low -
and
the soundest way to raise revenues in the long run is to cut rates now."

Bush cut the tax rate, and tax revenues increased. Supply side economics
obviously works, and the Laffer Curve is an accurate model of what
happens
when taxes are decreased. Hopefully the current data will put the
naysayer's argument to rest.



Doctor to patient: Remember last month when we told you that tests
revealed you had diabetes, AIDS, throat cancer, lung cancer, brain
cancer, colon cancer, high blood pressure, heart disease, swollen
tonsils and the mumps?

Patient, (glumly): How could I ever forget that?

Doctor: Well, I've got some good news for you! Your tonsils are no
longer inflammed, and we think you are recovering from the mumps.

Patient: Hallelujah! I'm well!


You guys want to cut the federal budget deficit? Stop spending money
like a bunch of drunks. That's far more direct than wondering whether
or not the tax cuts might stimulate the economy enough to begin
covering some of the bad checks the Repub-majority congress are writing
and the Repub prez is signing.


The increased spending is almost completely due to the war. Aside from
that, discretionary spending is virtually no different under Bush than under
most of the other administrations that preceded him.