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Record budget deficit

Bush Administration officials now say this year's budget deficit will set an all-time record by standing at $490 billion, as compared to the budget surplus of $128 billion that Bush inherited.

News media are using the $490 billion number even though it apparently excludes $80 billion of Iraq and Afghanistan war spending.

I can't imagine why the Bush Administration feels compelled to admit there is any deficit at all. If they ignored a further $500 billion of spending - and I don't see why they wouldn't, given that they ignore the war spending without any shred of a rationale or excuse - they could accurately note that there's otherwise a $10 billion surplus, and enjoy the nice headlines from that.

UPDATE: Okay, calling it a record is admittedly dubious given that more meaningful comparisons between years would (a) adjust the nominal deficit for inflation, and (b) report it as a percentage of GDP rather than an absolute dollar amount. But then again, given the deficit's defects as a measure purely of current year cash flows, paying it any attention in lieu of focusing on longer-term measures (such as the fiscal gap) paints too rosy a picture.

Full post as published by Start Making Sense on July 28, 2008 (boomark / email).