Next?

[Nephythys]

I'm sure it still isn't good enough (http://www.nytimes.com/2005/07/13/business/13deficit.html?ei=5065&en=9dcb06aa0092a4e4&ex=1121918400&partner=MYWAY&pagewanted=print)

Because for some people it never will be- :D

[Ghoulish Delight]

Because for some people it never will be- :DYeah, the people who read the whole article.


But many independent analysts cautioned that the improvement, though notable, could prove ephemeral and that it did little to eliminate much bigger fiscal problems just over the horizon. "Lawmakers who allow themselves to be lulled into thinking that the economy is growing its way out of the deficit," wrote Edward McKelvey, an economist at Goldman Sachs (http://www.nytimes.com/redirect/marketwatch/redirect.ctx?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=GS) in New York, "are unlikely to support the painful measures needed to reach a more lasting solution."

For one thing, analysts note, federal spending has continued to climb rapidly, about 7 percent this year. Despite cutbacks in many domestic programs, spending has surged for the war in Iraq as well as in certain benefit programs providing health coverage.

In addition, while a lot of the increase in tax revenue flows from the improving economy and higher incomes, part of the jump stemmed from a special factor: the expiration of a temporary tax break that allowed companies to write off their investment in new equipment much more rapidly than normal.

[Motorboat Cruiser]

Yeah, I have a hard time believing that anyone could read that entire article and come away feeling warm and fuzzy about things, unless you only made it through the first two paragraphs.

[scaeagles]

There are certainly things to be wary of - social security and medicare being the two primary things with boomers nearing retirement.

However, I am encouraged by a few things.

First, the tax cuts certainly stimulated economic growth and higher tax receipts from businesses. Taking out the depreciation change, there was still significant increases in that area, which happened because consumers had more of their own money to spend.

Secondly, when coupled with the unemployment rate down to five percent, it shows that businesses are hiring more workers.

Thirdly, the article states that incomes are growing.

Lastly, though I am against deficit spending except in matters specifically mandated by the Constitution of the USA, a deficit of 3.5% of the GDP is historically not too bad, and much, much better than anticipated.

There are always financial crises looming on the horizon of any macro-economic situation.

One other thing encourages me - oil prices are incredibly high. Thus fuel prices are are way up, and since close to 90% percent of all consumer products are shipped by truck, it is remarkable that inflation is not a problem. Interest rates remain low because of that, and that helps a debt ridden consumer population, and cheap money also is an economic stimulus.

[Name]

oil prices are incredibly high. Thus fuel prices are are way up, and since close to 90% percent of all consumer products are shipped by truck, it is remarkable that inflation is not a problem. Interest rates remain low because of that, and that helps a debt ridden consumer population, and cheap money also is an economic stimulus.Inflation may not be a problem right now, but a truckers strike would be devastating.

[scaeagles]

Inflation may not be a problem right now, but a truckers strike would be devastating.

This is true at any point in time.