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Some Buy Into It, Some Don’t

July 12th, 2006

Some press outlets bought into the White House lie, simply regurgitating White House press releases:

An unexpectedly steep rise in tax revenues from corporations and the wealthy is driving down the budget deficit this year,… White House officials are expected to announce that the tax receipts will be about $250 billion above last year and that the deficit will be about $100 billion less than projected six months ago.

The rising tide in tax payments has been building for months, but the increased scale is surprising even seasoned budget analysts and making it easier for the administration and Congress to finesse the past year’s run-up in spending.

Tax revenues are climbing twice as fast as the administration predicted in February, so fast that the budget deficit could decline this year.

But then, a few media outlets actually noticed the dog and pony show:

When President Bush releases the traditional midsummer update on the budget today, he is expected to announce that federal revenue has soared above predicted levels and that the deficit is headed for a welcome decline from earlier estimates — as much as 30%, or $125 billion, below the level projected just five months ago.

And the president will likely attribute the windfall to his tax cuts, which the administration says are stimulating economic activity and generating the torrent of tax revenue.

But the apparent good news will not strike some economists as surprising: This will be the third year in a row that the administration put forth relatively gloomy deficit forecasts early on, only to announce months later that things had turned out better than expected. To some skeptics, it’s beginning to look like an economic version of the old “expectations” game.

In short, the White House has been underperforming, and after 5 years, still hasn’t reached the revenue levels Clinton attained in 2000. So to hoodwink the media and the people, they first predict much lower revenue than expected, then they act like the numbers that come out are miraculously high.

What’s more, the White House attributes the jump to all those tax cuts for corporations and the wealthy. See? It worked!

Actually, no it didn’t. The increase in profits came from outsourcing of labor and paying less than ever before for domestic workers, cutting corners and maximizing profits. The irony is, had taxes not been slashed for corporations and the rich, they would not have lessened their attempts to make money at all (if anything, they would have tried harder in order to meet their goals, but most likely the end result would have been the same), and the tax revenue would have been much higher. Without all those tax cuts, we probably would have a much smaller deficit than now.

As always, it’s perception the politicians play on. Reality is a joke in those circles.

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  1. Tim Kane
    July 12th, 2006 at 10:25 | #1

    The other shoe to drop is, because wages are being pushed down, courtesy of Bush & co giving bargaining advanatages to corporations, and the upper class making so much more money, it means fewer and fewer people are paying more and more income tax. Which means will start here people bitching about how the top 25% pay 70% of the taxes. They’ll say its not fair, its their money, and the whole cycle of tax cuts begins all over again.

    Oh the insanity.

  2. Luis
    July 12th, 2006 at 11:03 | #2

    Excellent point; I have no doubt that is exactly what will happen.

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