Here is why the US Deficit went down (rethugs and WH won't tell you)

[cthrumatrix]

FWIW...There was a "huge tax break given to corporations to "repatriate" thier profits:

http://www.jsmineset.com/

I am sure you recall October 2004 when congress passed a revision to the tax code, allowing US multinationals to repatriate billions of dollars in overseas profits to be taxed at 5% not 35%. (That is an 82% reduction).

Well, the Wall Street Journal estimates that $750 billion dollars in profits will be taxed that never would have happened had it not been for this special revision.

It ends in October of 2005. So let's do some quick math, assuming 50% of the tax revenue has made it into the Department of Treasury coffers, $750 B (X.50%X.05%) =$20 billion dollars. The latest deficit number was $10 billion better than expected. By the powers of reason, I think it's safe to assume the improvement in budget numbers are almost FULLY attributable to this provision.

With that said, it's foolhardy for the Bush administration to label this one time tax increase as systematic and constant, especially when it's impossible to predict these kinds of things. These guys are also making assumptions about the stock markets and economic growth. Scary!!

snip


always good to know why things happen in Bush's "smoke and mirror" numbers.

[KharmaTrain]

1. Sheeple Are Starting To Ask "Where's Mine?"

This reminds me of the 80's...we heard all these rosy economic forcasts and how the economy was booming, yet our incomes stayed stagnant and our costs continued to rise. Of couse, I was only making $12,000 a year and there weren't many jobs that were paying better.

People know statistics lie and liars use statistics. Go to the gas station and see $2.50 a gallon gas, look at your local tax bills and see the steep increases in your mortgage and property taxes, go to the grocery store and be prepared to pay 25% more this year for the same stuff you bought this time two years ago. I look around and see a ton of houses in my upper-middle class neighborhood up for sale and no buyers. Welcome to stagflation.

I just saw David Drier trying to make political points on this non-issue a few minutes ago. This is the only good news these goons can play today and it's already been ignored.

Let the Repugnicans continue to lie and distort. The curtain is starting to be removed and their lies are so open and blatant we need do little then let them choke on them in the weeks and months ahead.

Cheers...

[gratuitous]

2. And it's not the deficit that's gone down

It's the White House's projection of what the final deficit number is going to be. And even if the scenario works out as rosily as the White House predicts (and they don't have a real good track record when it comes to forecasting future events), the deficit will still be the fourth-highest ever for one year.

Would you pop the cork on the Dom Perignon if your accountant said, "Gee, it looks like you're overdrawn by $6,000. No wait . . . It's only $4,000." You're STILL in a world of hurt, financially.

[yukie]

3. Some flaws here...

The budget deficit reduction for 2005 is expected to be almost $100 bil, not $10 bil or even $20 bil. Based on the snipped logic, it can't be true that "ALL" or even "MOST" of the reduction can be attributed to repatriated dollars.

The President has little or no real power to change the economy. The factors that control this are outside of the influence of politicians. Key factors are financial organization sectors, population literacy levels, international trade, availability of resources, and innovation (hard to quantify or modify). Taxes can have a mid-term effect, but most factors have an effect only over a considerable amount of time.

Bush will take credit for the reduction, but it is nothing he did. Just like Clinton took redit for the reduction his first year in office. What is really happening is that the US workforce (you and me) and business (usually small businees with less than 100 employees)are becoming more productive. In other words, you and I (the people) are causing the deficit to go down. Now we need to keep the politicians from spending the moeny that we are earning.

[papau]

4. Are our media - the folks doing the fiscal/company/business side - NUTS?

I am looking for about 1.5 Trillion to come back and be taxed (about twice what the WSJ estimates) - so 750 time 5% = $40 Billion in reduction in the 10/1 to 12/31 2004 time frame - and $40 billion in the to 10/1 2005 time frame.

Add in a bit of higher capital gains just because the local market has done OK in the past year, and add in the overestimate we all noted when the estimate was originally done, and add in the expense we know that will be pushed into the next fiscal year so as to justify this years tax cut, add in the payroll tax growth that appears not to have been anticipated which Bush uses as an offset, and finally add in the higher than expected corporate profits from just "growth" with no wage increase, and I think you have a good handle on the reasons for the "great - only a little bit over $300 billion" estimate for the years deficit.

I wish I could run a business on making investors happy that my projected years loss of 50% of operating capital will now only be a 25% loss of operating capital.

Are our media - the folks doing the fiscal/company/business side - NUTS?