Budget Deficit a Concern, Says White House's Mankiw

[Judi Lynn]

Budget Deficit a Concern, Says White House's Mankiw
Wed December 17, 2003 06:03 PM ET

WASHINGTON (Reuters) - A top White House economic adviser said on Wednesday the United States would likely run a budget deficit of between 4 and 4-1/2 percent of U.S. gross domestic product in fiscal 2004 -- or roughly $440 billion to $495 billion.

White House Council of Economic Advisers Chair Gregory Mankiw said growing shortfalls were a concern.

"Next year we will probably have a deficit in the ballpark of 4 percent of GDP, a little more -- maybe 4-1/2 percent of GDP," Mankiw told the Exchequer Club in answer to a question.

Aides said Mankiw was referring to fiscal 2004 and based his estimates on a roughly $11 trillion economy.
(snip/...)

http://www.reuters.com/newsArticle.jhtml?type=politicsNews&storyID=4011278

[ClintonTyree]

1. If they're admitting to 4 - 4 1/2%..............

you can bet the farm that it'll be over 5%, these fools always lowball the stats. That means the Treasury is going to have to print a LOT of money. And no one is worried about inflation? Note to self; buy more gold.

[David__77]

2. I've read his textbooks.

He was always clear on the real relationship between deficits and interest rates and so forth. But when he joined the economic advisors, he fell silent. I am surprised he "says" anything at all...

[ozone_man]

3. So, what is the relationship?

They go up as the debt increases I assume. Just like the credit card companies that have someone that can't keep up with payments.

This is the number one issue, in my opinion, along with jobs.

[54anickel]

4. Just where does Shrub think the money's gonna come from to get it...

down to 2 percent of GDP?

Love this part:

"He wants to shrink it in half toward 2 percent of GDP over five years, and his (fiscal 2005) budget will reflect that," Mankiw said, referring to a budget plan the White House will unveil in early February.

"There are two ways to do that: one is to get the economy growing again in order to get revenues, and the other is to restrain spending," Mankiw said.

Sau good bye to more entitlements and so called discretionary spending.

He can't raise revenues based on all the tax cuts he gave to the weathly, the tax free status of companies that locate ther main office in Bermuda and the Foreign Sales Corporation law that gives tax breaks in the form of reduced export taxes to the likes of Boeing and Catepillar.

About the only revenues left coming in are the income taxes from the working class these days (those lucky enough to have a job)

[teryang]

5. I know this isn't reliable but

...I received one of those financial advisory puff pieces a few days ago that said the FY 2003 deficit was really $950 Billion and that the FY 2004 deficit would be an even trillion.

It reminded me of one of those zero dark thirty telecasts from Congress in which some little known Democratic representative said that the 2003 deficit would be closer to a trillion than 500 million. You know I believe it. The budget has been Enronized.

If anyone has any "investments" at this point, they should consider the natural resource, materials, real estate and other tangible assets to hedge themselves to some degree if they haven't already.

I'm out of work. What do I know?

[Zo Zig]

6. Sorry to hear your out of work,

I bet this guy will be out of work soon as well, needs to spend more time with his family, or golfing with Paul and Larry.