by user Dannyjnorman
President Bush 's crystal ball shows the budget balanced by 2012.
The non-partisan Congressional Budget Office (CBO) shows a revenue surplus for 2012.
And interestingly enough, the liberal think tank, Center for Budget and Policy Priorities, is willing to admit the budget is headed in the right direction.
> "Right now, we're in some sense in a relatively good spot...We're in the sixth year of an economic expansion," a time when federal revenues often rise along with a growing economy.
It is interesting that a liberal think tank came up with this because one of the secrets the government doesn't want the public to consider is that income tax revenues (taxes you and I pay) increase every year that the economy grows and taxes are not cut.
There are some assumptions though.
Bush's numbers are built on the assumption that US involvement in Iraq is going to dwindle rapidly. The Democrats are working as hard as they can to help Bush achieve this goal.
The CBO's numbers are based on Bush's tax cuts not being renewed in 2010. This will not happen. Tax lobbies will aggressively attack this issue in Congress just before the November 2008 elections.
The perception of raising taxes would be deadly for the Republicans and Democrats at that point. Going back to 2004, that is when Bush bought extra votes in Florida by handing out taxpayer money in the form of medicare entitlements. Making the tax cuts permanent would foster the same reaction.
Any Congressman or Senator who does not sign off on making the tax cut permanent will he highlighted by tax lobbies and suffer at the polls.
Medicare reform and other healthcare costs could throw a wrench into the numbers. As the baby boomers retire, healthcare and medicare costs will skyrocket unless some healthcare reform is passed.
Also, with the greater number of retiring baby boomers, the workforce required to generate the same Gross Domestic Product will dwindle. This requires some rational immigration reform.
The other danger is that as the budget gets closer to being balance, Congress will have the urge to spend money on building the bridge to nowhere.
If the government insists on being fiscally irresponsible, I'd rather see it in the form of tax cuts. That way I can build my own bridge to nowhere with the money rather than having the government build it for me.