If you can't trust Larry Kudlow ...
On January 12th, I was pleased to hear from Larry Kudlow (of CNBC "Kudlow & Cramer" fame) that Bush's pro-growth tax policies are drastically reducing the federal budget deficit:
Here's one story you won't find in tomorrow's front pages: The US budget deficit is shrinking rapidly. Today's Treasury report on the nation's finances for December shows a fiscal 2005 year-to-date deficit that is already $11 billion less than last year's.
[snip]
The really big budget story is the explosion in tax revenues prompted by tax-cut led economic growth over the past eighteen months.
[snip]
With supply-side tax reform on the way, shrinking budget deficits, new-found spending discipline and a president determined to confound conventional wisdom by reforming Social Security, George W. Bush's second term is off to a roaring start even before he is officially sworn in next week.
So I was shocked and dismayed to read this morning's stories on the state of the deficit.
First, from the New York Times:
The White House announced on Tuesday that the federal budget deficit was expected to rise this year to $427 billion, a figure that includes a new request from President Bush to help pay for the war in Iraq.
The White House's announcement makes it the fourth straight year in which the budget deficit was expected to grow; as recently as last July the administration had predicted that the deficit, which was $412 billion last year, would fall this year to $331 billion.
[Don't miss the nifty chart that comes with the article.]
Second, the headline from the Los Angeles Times article discussing the CBO's budget forecast:
$1.3 Trillion in Deficits Forecast Over Decade
Cumulative total is 60% more than the estimates of just four months ago.
My guess is that the CBO doesn't understand the potency of tax cuts for revenue growth. How else do you explain why they think making the Bush tax cuts permanent will make the budget outlook worse?!
Postscript: Mr. Kudlow was recently a member of the Bush-Cheney Transition Advisory Committee.
Perhaps someone might like to ask him whether he has ever been paid by the Bush administration to promote its economic policies.
But putting that aside, how about a nomination to replace Alan Greenspan?
2:15:27 PM 
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