Editore"s Note
Tilting at Windmills

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February 2, 2004
By: Kevin Drum

NONE DARE CALL IT LYING....Over at Slate, Daniel Gross points out that the Bushies have more than just a problem with spending more than they say they will. They also have a problem with being a little, um, optimistic in their revenue forecasts. Here's their track record:

  • 2002 revenue estimate: $2.19 trillion.
    2002 actual revenue: $1.85 trillion
    Error: -15.5%

  • 2003 revenue estimate: $2.05 trillion.
    2003 actual revenue: $1.78 trillion
    Error: -13.2%

  • 2004 revenue estimate: $1.92 trillion.
    2004 actual revenue (latest projection): $1.8 trillion
    Error (so far): -6.3%

  • 2005 revenue estimate: $2.04 trillion.

Not very confidence inspiring, is it? And as Gross points out, $2.04 trillion would be a 13% increase over 2004, a year-to-year increase bigger than any we've seen for the past 20 years.

In other words, given their track record we can probably discount the administration's figure by 5-10% or so, a reduction of $100-200 billion. Which means that even if we accept their spending numbers, next year's deficit is still likely to be bigger than this year's rather than 30% lower as they are projecting.

The answer, I suppose, will be yet another round of tax cuts for the rich in order to boost revenues. It hasn't worked yet and has never worked in the past, but perhaps if we all clap our hands loud enough and chant "Laffer Curve" over and over it will finally work this time. Faith-based budgeting, anyone?

Kevin Drum 9:56 PM Permalink | Trackbacks

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