A report out from the feds yesterday once again revises the federal budget deficit down. The budget is coming into balance even faster than President Bush originally planned. Why? Not because anyone is doing much to hold down spending, but because revenues are skyrocketing. What? You mean you can cut tax rates and increase revenue? Well, we've done it again. Time and time again it is proven that tax revenue, within certain parameters, has more to do with economic growth than it does the actual tax rates. Thus if one's goal is to increase revenue, it is actually better to keep rates relatively low and allow the economy to produce wealth. Here are a couple snippets from the article:
The federal deficit is running sharply lower than last year even though spending in August set an all-time high, the government reported Thursday.
The Treasury Department said that the deficit through the first 11 months of this budget year totaled $274.4 billion, down 9.8 percent from the same period a year ago.
Analysts believe the deficit for all of 2007 will actually be even lower because they are forecasting a sizable surplus in the final month, reflecting in part timing issues that caused about $44 billion in Social Security and Medicare payments that normally would have been made in September to be shifted into August.
The Congressional Budget Office is forecasting that when this budget year wraps up on Sept. 30, the deficit will total $158 billion, down by 36.2 percent from last year's $248.2 billion deficit.
(snip)
For August, the deficit totaled $116.9 billion. However, about $44 billion of that figure reflected payments for Social Security and Medicare that were mailed in August because Sept. 1 fell on a Saturday and Labor Day came on Sept. 3.
Through the first 11 months of the current budget year, receipts total a record $2.282 trillion, up 7.5 percent from last year, while outlays totaled a record $2.557 trillion, up 5.3 percent from last year.
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