Monday, November 13, 2006

Graphic of the day 

Seen this bad boy yet? It's from J. Edward Carter's article on the incredible shrinking federal budget surplus. Most interesting of all is that non-defense discretionary spending on this chart is shown to have risen $700 billion between 2002 and 2011 (projected.) I would think that's something the Republicans would not be proud of. And yet,

Subsequent tax cuts further reduced projected federal revenue, bringing total tax relief under President Bush to $1.8 trillion over ten years. This accounts for one-fifth of the $8.5 trillion swing.

Yet even this orchestrated tax relief pales in comparison to the impact the recession, technical adjustments, and other developments had on the budget projections. These factors trimmed nearly $2 trillion from projected revenue while boosting projected outlays $519 billion. This accounts for 29.4 percent of the swing.

Still, all of this explains barely half the swing. The remaining half is a result of the spending Congress enacted over the past six years to bolster national defense, fight the war on terror, provide seniors with Medicare prescription-drug benefits, confer disaster relief, and fund a myriad of other programs.

Carter's point is that there never was a surplus, and to the extent that you are trying to forecast the behavior of a Congress awash in extraordinary revenues from the tech bubble of the late 1990's, he's right. But the Medicare prescription-drug benefits were not a necessary expenditure, and disaster relief has been pork-laden. Thus Carter -- a former Bush Treasury official -- opines
So, what do the clues reveal about the missing $5.6 trillion surplus? 1) It never existed. 2) It never would have existed. 3) Policymakers never intended for it to exist.
True, and 3) is the problem and one reason why the Democrats now hold Congress.