July 19, 2005,
By Jerry Bowyer
Last week, Josh Bolten, the director of the Office of Management and Budget, announced that the budget forecast has been revised. The projected deficit, it seems, is sinking like a stone. The prior estimate had been $427 billion, the new estimate is down $94 billion to $333 billion. Knowledgeable observers braced themselves for the ďrosy scenarioĒ charges that pop up any time the Bush administration says that something might be going better than expected. But something happened that rendered this line of attack impotent: The government released its monthly cash-flow statement, and it told the same story as Boltenís forecast revenues are rising and the deficit is falling.
The Treasury budget is not a guess, a hope, or a forecast. It is a simple accounting of the dollars that have flowed into the federal government from tax revenues and the dollars that have flowed out through expenditures. Hereís what it shows: Total revenues were up 15 percent through the first nine months of fiscal year 2005 compared to the year-ago period. During the first nine months of fiscal 2005, the federal government ran a deficit of $249.8 billion, 24 percent lower than the deficit during the same period last year.
Sometimes the economic statistics printed in the newspaper look so-so; sometimes they look good, and sometimes they look great. Thatís the problem with economic statistics. In the worst of times some of them are looking up, and in the best of times some of them are looking down. So whatís an investor to do? For starters, itís always a good idea to find out whether the numbers youíre reading are based on somebodyís guess or somebodyís oath.