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Washington Shelved Report of Deficit
Yahoo News ^ | 5/29/03 | AFP

Posted on 05/29/2003 9:57:58 AM PDT by DoctorMichael

Latest Developments

Washington Shelved Report of Deficit
(AFP) - In the midst of negotiating a steep tax cuts package, the US government shelved a report that showed the United States faces future federal budget deficits of more than 44.2 trillion dollars.

President George W. Bush's administration chose to keep the findings -- commissioned by then-Treasury secretary Paul O'Neill -- out of the 2004 annual budget report, published in February, London's Financial Times reported.

The newspaper desribed the study as "the most comprehensive assessment of how the US government is at risk of being overwhelmed by the 'baby boom' generation's future healthcare and retirement costs."

The Financial Times hinted that the decision not to publish the report may have been because the White House was campaigning for a massive tax-cut package that critics claim will expand future deficits.

The study, according to the same source, said that sharp tax increases, massive spending cuts or both are unavoidable if the US is to meet benefit promises to future generations.

"It estimates that closing the gap would require the equivalent of an immediate and permanent 66 percent across-the-board income tax increase," the Financial Times said.

"The study was being circulated as an independent working paper among Washington think-tanks as Bush on Wednesday signed into law a 10-year, 350-billion-dollar tax-cut package he welcomed as a victory for hard-working Americans and the economy," the newspaper said.

Kent Smetters, then-Treasury deputy assistant secretary for economic policy, and Jagdessh Gokhale, then a consultant to the Treasury, were in charge of the analysis, the newspaper said.

"When we were conducting the study, my impression was that it was slated to appear (in the budget). At some point, the momentum builds and you think everything is a go, and then the decision came down that we weren't part of the prospective budget," Gokhale was quoted a saying in the front-page article.

O'Neill, who was fired last December, refused to comment, according to the same source.

The Bush administration has come under severe criticism for the tax cuts package, which come on top of a 10-year 1.65 trillion tax cut program enacted in 2001, at a time when the US economy is sputtering and unemployment is steadily rising.


TOPICS: Business/Economy; Extended News; Front Page News; News/Current Events
KEYWORDS: daficit; deficit
Of course this is from the LONDON Financial Times, however..............
1 posted on 05/29/2003 9:57:58 AM PDT by DoctorMichael
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To: DoctorMichael
These 'studies' aren't worth the paper they're printed on. didn't we just have 'projected' surpluses of trillions of dollars 3 years ago? Viola! They aren't going to happen.

And if you beleive these numbers, what difference is $350 billion going to make???

2 posted on 05/29/2003 10:01:02 AM PDT by Trust but Verify
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To: DoctorMichael
Business as usual: Quick, sweep it under the rug, maybe it'll disappear.

THAT's a sign of true "leadership"!!!

</sarcasm>

3 posted on 05/29/2003 10:03:03 AM PDT by Willie Green (Go Pat Go!!!)
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To: DoctorMichael
"the most comprehensive assessment of how the US government is at risk of being overwhelmed by the 'baby boom' generation's future healthcare and retirement costs."

Why? Government isn't responsible for healthcare and retirement costs. Please ask London Financial Times to look through the US Constitution for the Clause that states that government is responsible for these 2 things? Do most people realize that the US government could terminate Social Security at any point and the contributors would never see a dime? How about those people that pay into Social Security for 40 years, retire, then die 1 month after retiring. Are they getting their "FAIR SHARE" back? How about inheritance for their children? Nope...40 years of work evaporates into government income redistribution programs.

4 posted on 05/29/2003 10:05:40 AM PDT by xrp
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To: xrp
the real burden is interest on the debt itself. Which must be paid. Or risk a default. While Health and Human Services is our number one expenditure at about 400 billion a year. Interst on the debt is second at 330 billion. This could become a major problem.
5 posted on 05/29/2003 10:13:46 AM PDT by jd777
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To: Trust but Verify
.....what difference is $350 billion going to make???......

Agreed. Not much.

I think it again boils down to "Dynamic versus Static" computation of the projected numbers that go out far enough as to be unreliable and unrealistic.

However, I wish there was a bit more budget CUTTING in the latest budget though.............ala Rush's first hour yesterday, that I thought of starting a Vanity Thread on.

6 posted on 05/29/2003 10:13:51 AM PDT by DoctorMichael (Daffy-sit?)
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To: DoctorMichael
Here's the original Financial Times article:

US 'faces future of chronic deficits'

And, actually, it's from a U.S. Treasury Dept. commissioned report headed by Kent Smetters, at the time Treasury deputy assistant secretary for economic policy, and Jagdessh Gokhale, then a consultant to the US Treasury and now Federal Reserve economist.

The Financial Times simply reported the findings..

7 posted on 05/29/2003 10:14:58 AM PDT by AntiGuv ()
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To: DoctorMichael
Could this report be similar the report created in 1996 by American Enterprise Inst. that said Dow 3600 was the last phase before the next Stock Market CRASH similar to 1929?

Or Did the same guys that helped Paul Erlich work out the end of food by 1990 work as ghost writers with the help of JB at the Times? This is a joke.

8 posted on 05/29/2003 10:28:44 AM PDT by q_an_a
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To: jd777
"the real burden is interest on the debt itself."

Shhhh! Don't say that too loud. Many think deficit spending is a wonderful thing, and without consequences. Some of these profligates call themselves "conservatives," ironically.

9 posted on 05/29/2003 10:43:12 AM PDT by Shermy
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To: AntiGuv
UGLY READ
10 posted on 05/29/2003 11:06:16 AM PDT by y2k_free_radical
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To: DoctorMichael
All the more reason we need tax cuts, evidence shows cuts in tax rates increase government revenues.
11 posted on 05/29/2003 11:07:36 AM PDT by dfwgator
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To: dfwgator
To increase revenue enough to deal with these kinds of deficits, we should probably be cutting taxes to 0%.
12 posted on 05/29/2003 11:12:45 AM PDT by triplejake
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To: triplejake
No, the government should be into negative tax cuts...cut income tax to 0 isn't enough...it should give tax money back to people even if they pay no taxes...that way, the GOP can spend an infinite amount of money because if a tax rate of 30% increases government revenue, then 0% increases it more, and negative increases will bring it to infinity.

Wait, they are doing that. The GOP just voted for a child tax credit that even people who pay no taxes will get. Another vote buying...I mean wealth transfer...I mean compassionate conservative means to fiscal responsibility from your formerly deficit hawk, smaller government, less spending friends at the GOP.
13 posted on 05/29/2003 1:39:41 PM PDT by Jesse
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To: Jesse
I heard three times today that the child tax credit can't be used by people who don't pay any taxes, which I guess makes sense since it's a TAX CREDIT.

Bush said that he was willing to sign a bill that included the credit for people on Income Tax Welfare, but he didn't get one.

Looks like a few conservatives are still awake in Congress.

14 posted on 05/29/2003 1:43:05 PM PDT by ModernDayCato
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To: DoctorMichael
President George W. Bush's administration chose to keep the findings -- commissioned by then-Treasury secretary Paul O'Neill -- out of the 2004 annual budget report

I wonder if this was the real reason O'Neill was let go - because he was the one who commissioned this report.

15 posted on 05/29/2003 4:15:37 PM PDT by willowpar
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