From the Dow Jones Market Watch:

U.S. July federal deficit falls to $53 billion By Rex Nutting

WASHINGTON (MarketWatch) - The U.S. federal budget deficit shrank to $52.8 billion in July from $69 billion a year ago, the Treasury Department said Wednesday. The deficit was about $5 billion less than the $58 billion estimated by the Congressional Budget Office a week ago. Receipts came in $1 billion more than expected, while outlays were $4 billion less than CBO projected. Through the first 10 months of the fiscal year, the federal deficit has totaled $302.6 billion, $110.2 billion less than at this time in 2004. Receipts are up 13.7% year-to-date at $1.75 trillion. Outlays are up about 6.1% year-to-date at $2.05 trillion.

The current administration proposes that if you reduce income taxes then you put more money into the pockets of consumers, who turn around and spend that money in the free market. Tax the free market and the government gets more money than they would if they tagged the consumers directly. In the end, it really isn't reducing the amount of taxes that are collected, is it?

It sounds as if the plan is working, yes?

I don't consider myself to be an economic guru, but when President Bush talked about doing away with the complicated Income Tax laws and going to a pay-as-you-go sytem it sounded like a great idea. If you're interested in reading up about it, there are plenty of websites out there to wade through. Start with FairTax.Org.

Being pleased about the dwindling deficit and looking forward to eliminating troublesome tax code aside - the Federal Deficit is not the National Debt and that needs to be addressed as well.

Our National Debt is almost 8 trillion dollars. This animal needs to be tamed, and forcing the deficit to submit to our will is only the beginning. Forcing congress to adopt wiser spending policies is imperitive. Just take a look at how we have conducted ourselves the last 30 years, and you'll see that getting deeper into debt is one of the only remaining bi-partisan efforts.

If you look at our Federal Budget, you will see that the third largest expenditure is comprised primarly of paying down the interest on our loans. That's what our National Debt is you know, loans. It's kind of like a family paying out a quarter of it's income to pay off minimum payments on credit card bills. *cough* *cough*, not that I would know anything about *that*.

It's still just as scary when it has been adjusted for inflation (thanks to brillig.com for the graphs)

As you can see, except for a rise at the end of World War II, the Debt remained remarkably constant for nearly forty years when inflationary forces are taken into account. After 1983 however, with the notable exception of the Fiscal Years ending in September of 2000 and 2001, the trend has been upward even when inflation is taken into account.

Tip of the hat to GOPBloggers.org

Posted by Michael at August 10, 2005 05:41 PM