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Business News Update

Decrease in Federal Budget Deficit

34% - decrease in federal budget deficit - FY 2006 - FY 2007
49% - decrease in federal budget deficit - FY 2005 - FY 2007
60% - decrease in federal budget deficit - FY 2004 - FY 2007

The sharply-reduced budget deficit is a function of three things: (1) the general business/economic cycle, (2) restrained non-military spending by the 2005-2006 Republican Congress, (3) multiple tax cuts enacted by GOP Congresses from 2001-2006. As a percentage of GDP the current budget deficit is much lower than the prevailing deficits of the 1980's and those which occurred throughout most of the 1990's.

Some of you might instantly recognize the significance and the irony of that 60% drop in the deficit since 2004. Shortly after the Prez's re-election the Bush administration predicted the budget deficit could be halved by 2009 with a combination of further tax cuts and spending restraints. Not only liberal Democrats but various conservative malcontents responded with jeers and catcalls. As it turned out, however, the deficit fell by more than half and in far less time. Go figure.

For obvious reasons the chances of the media highlighting those items for the general public fell somewhere between zero and no f'n chance in hell.

Decrease in Medicaid Enrollment

Speaking of underreported items:

The first drop in Medicaid enrollment in nearly a decade led to the second smallest increase in Medicaid spending during that period -- 2.9 percent.

Medicaid directors attributed the 0.5 percent enrollment decline to a solid economy and to new documentation checks that require beneficiaries to prove their citizenship or that they are qualified legal immigrants.

Retail Sales

Retail sales in September grew 0.6%, substantially above expectations and twice the growth rate posted in August. Consumer spending accounts roughly for 70% of all economic activity.

Speaking of the economy:

Unemployment Rates

Sept. 1997 - blacks - 9.6
Sept. 2007 - blacks - 8.1

Sept. 1997 - Latinos - 7.6
Sept. 2007 - Latinos - 5.7

Sept. 1997 - whites - 4.3
Sept. 2007 - whites - 4.2

Sept. 1997 - women - 4.4
Sept. 2007 - women - 4.0

Sept. 1997 - men - 4.1
Sept. 2007 - men - 4.2

Sept. 1997 - overall - 4.9
Sept. 2007 - overall - 4.7

Jobless Claims

Despite total employment having grown by 16 million net jobs, fewer people today are being laid off in the workplace when compared to the same period 10 years ago:

310,000 - 4-week avg. of initial claims for jobless benefits, October 6, 2007
315,000 - 4-week avg. of initial claims for jobless benefits, October 4, 1997

Stock Markets

Stocks were volatile this week.

Speaking of which, back in early-2003 you could have purchased KB Home for around $25 a share (split adjusted). That was a period in which the liberal media was depressed even moreso than today. Stocks were selling off in a panic. In July 2005, however, KB Home peaked at over $80. Investors at that stage were giddy about the housing markets. Yesterday, however, KB closed at $29.60. Now investors and the media alike are depressed about the housing markets. In other respects the stock markets are happy. The media in the aggregate is quite angry.

$ 25 - 2003 - stock markets depressed; media also depressed (GOP won in 2002)
$ 80 - 2005 - stock markets giddy; media apathetic (not an election year)
$ 30 - 2007 - media angry (Bush still in office); stock markets manic-depressive

Morals of the story:

- Buy low. Sell high. Not vice-versa.
- Being a market/media Lemming is no way to achieve one's financial goals.


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Comments (9)

You are an idiot. The "def... (Below threshold)
Chris Key:

You are an idiot. The "deficit" you speak of only means that we aren't trying to spend as much more than we make each year (there is a vast difference between "budget deficit" and "national debt"). In other words, Bush is cutting programs like SCHIP because it looks better on paper or in blogs. We are still going WAY into debt with other countries (we are well over 7 trillion in debt now, and congress was forced to approve a 9trillion limit due to how fast we spend money) because the "fiscally responsible conservatives" in the whitehouse (and previously in congress) are anything but responsible or conservative. They do nothing but spend, spend, and spend some more.

What kind of idiot expects to fund a trillion-dollar war by lowering taxes anyway? When Bush got to office, there was about 5.5 trillion in debt. Now, after his war and his tax cuts, we are at 7.2 trillion (or more) and growing. A 50% increase from 1 president is phenomally abysmal, even from such a bad president as ours.

In other words, Bush is ... (Below threshold)
Les Nessman:

In other words, Bush is cutting programs like SCHIP

Got a linkie or something to prove that? No?

Bush is not cutting schip, idiot.

Bush is not cutti... (Below threshold)
Bush is not cutting schip, idiot.

Wrong as usual. Search Google News for schip shortfall. The shortfall by not expanding the program is between 9 and 11 million, meaning children will be dropped.

"The sharply-reduced ... (Below threshold)
rumors on the internets:

"The sharply-reduced budget deficit is a function of three things:"

(1)it is Javitz" and GOP pure unadulterated BullShit and a willful lie.

The truth is it's $186,000,000,000 bigger than this deceitful propaganda.

It is $78 billion in spent SS surplus for the current fiscal year, replaced w/ an IOU, not counted in the phoney-baloney Bush figures


Another $108 billion in interest to the SS Trust Fund for the already IOU-ed $2,000,000,000,000 (trillion) that Bush has "borrowed" from past SS surpluses, replaced w/ IOU's and the $108 billion in current interest is another IOU.

That means that the current $163 billion deficit is in reality $186 billion larger, for a total deficit of $349 billion.

This is the kind of slight-of-hand that the Reklepticans and their toadies like to lie about to the American public.

Javitz, your style of economics would have merited you a position as CFO for Enron.

So 'Rumors' - I ta... (Below threshold)

So 'Rumors' -

I take it you WILL apply exactly the same rhetoric to Clinton's supposed "Surpluses', right? Or does that only apply to Republicans, while Democrats don't have to worry about such inconvenient things? You try to act as if the Social Security boondoggle is to be lain at the feet of Bush - I am just curious enough to ask - under which party was Social Security initiated? I am also curious to ask - which party vehemently resisted any changes to social security, nay vehemently resisted even TALKING about changing it - instead attacking the president for even daring to bring it up? Could it be, say, Democrats?

I also dare you to look up the pre- tax-cut government revenue figures and the post tax-cut government revenue figures and do some elementary math.

So you don't have a problem with this 'sleight of hand' as long as democrats are the ones employing it?

Actually, the part about lo... (Below threshold)

Actually, the part about looking up pre and post tax cut revenue figures was meant for Chris. Also look up the actual revenue figures after Reagan's tax cuts and Kennedy's - and those of the early twenties for that matter - as opposed to what happened after the large tax increase in the late twenties.

As in, look at numbers rather than empty rhetoric.

And Krugman, damn his black... (Below threshold)

And Krugman, damn his black little heart, considered Social Security to be in trouble ten years ago.

What rock are you living un... (Below threshold)
Chris Key:

What rock are you living under that you didn't know bush vetoed the SCHIP extension that congress sent to him?

Another thing I didn't mention is that the "war" in iraq isn't in the budget; it is paid for by supplimentals. So his 60% decrease is anything but a decrease when you figure in approximately another 200 billion per year for the last 5 years.

So you are going to count e... (Below threshold)

So you are going to count every supplemental and emergency spending by every president now?






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