GAO grim on deficit outlook

[radfringe]

GAO grim on deficit outlook
By MARILYN GEEWAX
The Atlanta Journal-Constitution

WASHINGTON -- The federal government's budget is in far worse shape than most Americans realize, and the fiscal hole is deepening, the head of Congress' nonpartisan watchdog agency said Wednesday.

"Our projected budget deficits are not manageable without significant changes" in taxes or spending, U.S. Comptroller General David Walker said in a speech to the National Press Club. "We cannot simply grow our way out of this problem."

Walker, who heads the General Accounting Office, said he is a nonpartisan auditor whose job is to "state the facts and speak truth" about the nation's bookkeeping. Current accounting systems fail to adequately reflect just how severe the government's fiscal problems are, he said.

---snip---

His comments came as the Treasury Department on Wednesday reported the deficit had reached $400.5 billion for the first 11 months of the 2003 budget year -- twice as much as for the same period a year earlier.

[lindashaw]

1. The rest of the world is saying the same thing...

SPEAKING FREELY
The end of American economic supremacy?
By Hussain Khan

http://www.atimes.com/atimes/Global_Economy/EI19Dj01.html

snip...

Bush wanted to follow on the footsteps of Ronald Reagan by relying on the theories of the supply-side economists, who believe that tax cuts generate so much additional economic activity that they increase government revenues. In his election campaign, Bush used tax-cut philosophy to appeal for votes. But the enactment of these theories is producing unforeseen negative effects rather than the positive qualities that the original supply-siders had assumed.

snip...

In a scenario changed by September 11, and after the administration's decision to invade Afghanistan and Iraq to attempt to round up terrorists, the strain on the American economy has been so tremendous that these supply-side theories have fallen apart. Uncertainty and unemployment fear has grown due to this scenario. Psychologically, as in Japan, consumers were not encouraged to increase their spending as the supply-siders believed would happen under the tax cut measures. Their benefits were confined to the well-to-do, who simply deposited the extra money instead of spending it.

snip...

The deficit has thus increased more than 50 percent in just five months. This unforeseen increase is said to have occurred due to the Iraq war and the tax cuts. It actually shows that the tax cuts did not produce the results that the administration had expected. In fact, they were exactly the opposite.

snip...

In 2003, federal revenues are expected to fall to as far back as the 45-year-old level. The forecast is that the American economy will regress to the level of the 34th American president, Dwight D Eisenhower (1953-61). Federal revenues include a variety of sources of income, one of them tax revenue. If only tax revenue is compared, it is going to fall to about the 60-year-old level of 1943.

The present state of social security is such that one third of the dollars in this account have to be borrowed from outside, as internal revenues are not sufficient to cover costs. This is the largest share of deficit-financed spending in the past 50 years. This deficit spending is forecast to increase $400 billion by 2008. If no cuts are made in social security, medicare, defense and debt service, government spending on everything else - from education to homeland security - would have to be slashed by more than 80 percent to restore budgetary balance. The United States is in for a rough ride.

[teryang]

5. This article is mistaken

<The present state of social security is such that one third of the dollars in this account have to be borrowed from outside, as internal revenues are not sufficient to cover costs. This is the largest share of deficit-financed spending in the past 50 years.>

First of all, money is being borrowed from SS revenues to finance general revenue items. It is currently in surplus not deficit. Deficits in SS are projected in outyears not currently. These deficits worsen as the so called lock box is pilfered to finance the Defense department, homeland security, ill considered war and tax cuts for the rich.

As one analyst pointed out, just returning to the status quo tax structure prior to the current regimes seizure of power would eliminate most of the deficit. The solutions are undo the tax cuts for the rich, get out of Iraq, dismantle homeland security, and get rid of the carpet bagging rightest radicals who have taken over the government to enrich themselves at the country's expense.

[kentuck]

7. But even after borrowing form SS fund, we are still $600 billion

in deficit. We would have a deficit of about $750 billion if not for the Social Security funds..

[ozone_man]

10. I think that he is talking about future social security solvency,

not present. He mentions the SS surplus at present in the context of determining the real deficit.

"Private economists now forecast a 10-year deficit of around $4 trillion-$6.7 trillion, excluding the social security surplus."

I think this deficit spending is an attempt to dismantle the SS system.

[cthrumatrix]

2. but..but....shrub said we can "outgrow productivity" ...... for jobs

he wouldn't mislead the murican people...would he?

[dbt]

3. bu$h dosn't HAVE to mislead Murkins

There are five TV networks falling all over themselves to do the job for him. Case in point: 70% of Murkins believe that Saddam was behind the 9/11 attacks. How the hell did that message get out?

:argh:
dbt

[ayeshahaqqiqa]

4. This is one reason why

so many Republicans are looking hard at the Democratic candidates. These members of the GOP believe in small government and balanced budgets. What they see Bush doing is worse than the worst "tax and spend liberal" ever did.

[ozymandius]

6. It could be fact - maybe urban legend.

I read that when Clinton took his first look at the "actual economic figures" that resulted from the first Bush presidency, he wanted to haul GHW Bush away in chains for defrauding the American public. Reportedly, Alan Greenspan talked him out of it.

Whether or not this is true, we are fed a steady line of information from the GAO that would indicate the same thing going on under Bush 2. It makes me wonder if the next president will do the same. Because this budget crisis is being handled in a way that smells like intentional fraud and theft.

[salin]

8. refresher on HOW bad... speech of GAO head

http://www.gao.gov/cghome/npc917.pdf

[salin]

9. and the debt clock

http://www.toptips.com/debtclock.html