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Budget Surplus Follows Tax Cuts
The Treasury Department this week reported there would be a $54 billion swing from projected deficit to surplus in the April-to-June quarter, after an unanticipated gush of tax payments poured into the Treasury before the April 15 deadline. That prompted private forecasters to lower their deficit projections for the fiscal year that ends in September. ... more
NeophytePundit adds:
But the real story behind the higher tax payment numbers is the successful supply-side experiment that began in the middle of 2003, when investment tax rates were slashed on capital gains and dividends. With new incentives to counter the deflation of investment in 2000-2002, both capital formation and economic growth have come back from the dead over the past 2 years.This is great news because our system of debt growth depends on a faster rate of economic growth, a feat that appears increasingly difficult in the mixed U.S. economy.
The question that enters my mind is: When will the world's super power begin spending less than it takes in?
Posted by tim at May 9, 2005 11:49 PM
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