Reply #106: Treasury's Quarles-U.S. budget gap 'very manageable'

[UpInArms]

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=2006-03-09T194929Z_01_N09196395_RTRIDST_0_ECONOMY-QUARLES-DEFICIT-UPDATE-1.XML

WASHINGTON, March 9 (Reuters) - A top U.S. Treasury official said on Thursday the Bush administration was running "a very manageable deficit" that posed no problem for the government in raising needed finances.

"This is not a fiscal emergency," Treasury Undersecretary Randal Quarles told Reuters in an interview. "We've got a budget that is very strict on expenditure, we've got a path -- that we've done a pretty good job on -- that brings the deficit down over time."

Quarles said a projected $423-billion budget shortfall for fiscal 2006 was less than 3 percent when calculated as a percentage of national economic output, in line with the trend of the past four decades.

"That is a very manageable deficit. That is roughly in line with what the average deficit has been over the past 40 years," Quarles said, adding that this was particularly the case given the economic growth in the United States of roughly 3.4 percent a year estimated by most forecasters.

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Quarles described government revenues, primarily from corporate and personal incomes taxes, as "very strong" and added: "We've got the strongest revenues we've had in the history of the republic."

The annual budget deficits flow through into the nation's accumulated debt, which has been rising and has forced the Bush administration to call for an increase in the debt ceiling to permit Treasury to keep borrowing and to avoid potential default on its debt burden.

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hmmm.... described government revenues, primarily from corporate and personal incomes taxes

That does not appear to be true - per this chart:



methinks that the bulk of the "revenue" is coming from fines and levees against corporate malfeseance and associated criminal activities that are never "admitted or denied" by the parties that are paying billions in settlements. (jmho)