Budget Deficit Forecast cut by 100 Billion

I apologise in advance for butting in on an American budget discussion, but a few points were raised that I feel need addressing.The first point is that the discussion always gets polarised between the traditional view associated with Democrats and Republicans. That is, Republicans like no deficit and the Democrats do. The last 10 years show the fallacy of that viewpoint with the last Democrat president nearly balancing the books and the current president, a Republican, running up a large, consistent, year on year deficit. Surely we could discard this traditional view and stop banging heads on that one. The point really should be about economic viewpoint not political.Secondly, the revised figure for the deficit is in itself pretty irrelevant. The problem I would have is why were the initial estimates so out of sync with what seems to be the real outcome? A 22% error in the original estimates is a pretty big one, and is certainly way outside any statistical error or adjustment for extraordinary circumstances (these factors would have been incorporated or weighted into the original estimate). As support for good economic stewardship and specifically for tax cuts, again I would be doubtful. Specifically, why would the government underestimate the impact of a significant economic policy, one of the central planks in its economic strategy, and by such a large factor? They want to sell the idea of a tax break and calculate the impact in the best light for that tax cut, and they underestimate it? This suggests two things straight away (it suggests a lot more but I'll stop at two). The first is that the economic upsurge is only partly connected to the tax break policy, and that something else has happened. What that is I could not say. The second is that the tax break was not intended as an economic measure but a political one. The figures were only massaged to sell the idea but really not meant for serious economic scrutiny as the tax breaks were not based on economic principle. And what has followed has borne this out.Thirdly, a point I mentioned in passing in the second point is the deficit itself. The notion that a deficit is a bad thing in itself is wrong. The reasons for the deficit and the size of the deficit and the means to pay for the deficit are much more important factors. Extraordinary factors can and do account for deficits. FDR ran up a huge deficit in his fight with the Depression in the 30's. Britain was still paying off loans for WWII into the mid-eighties. As they say 'Shit happens'. On a personal level we all run up deficits. The mortgage, car payments and student loans are deficits, yet are they bad? We run up a debt to increase, in the long run, our net worth and earning potential. They are not bad until we lose the ability to pay for them. Companies use debt to buy other companies, fund research and expand. All good things and no problem when the debt can be paid for. Economists of most factions agree that deficit budgets are not in themselves a bad thing. Monetarists, Keynesians, Neo-Classicists, Classicists etc all accept that circumstances dictate and that in some circumstances deficits are necessary. What they usually disagree on is the degrees of intervention, the politics and the individual. That is,is it the government's (left,right,middle,blue ,red) job or should the individual have the responsibility.A final point is more political. Politically I am left of centre, economically I favour more government than individual. That said, the Monetarist experiments of the last 25 years in the UK and America have convinced me that a mix of the two is essential, ie the individual making economic choices themselves is as important as the government's role. What the current US administration is doing puzzles me. It obviously wants to favour the individual, tax breaks so you spend the money, yet seems to favour tax breaks for a minority. The rich minority. Sure this is good news for luxury goods manufacturers and their employees and yes the trickle down effect will fuel the economy. However, using the UK as an example, already wealthy people when getting more money are more likely to save it or spend it abroad or buy foreign goods than the less wealthy. That does not really fuel your domestic economy. Yet at the same time the government intrusion/intervention is getting more. The government has used events in the last 5 years to start a couple of wars (sending you, your children, your friends and a hell of a lot of your money to the farthest reaches of the globe), increase monitoring of private individuals, adding layers to beaurocracy and the Patriot Act. (all of which sounds like a lot of govt intrusion to me). This would bring me back to point two. The economic policy followed by Bush is not economically based. It is political, and I hope that, in light of the estimates, that the economic value proves to be a real bonus.

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Apophenia:seeing patterns or connections in random or meaningless data.
Pareidolia:vague or random stimulus being perceived (mistakenly) as recognisable.Ramsey Theoryatterns may exist.Whoops!