Final Tally of 2004 Budget Deficit

Yesterday the Treasury Department made it official: 2004’s budget deficit was $413 billion, which is about 3.6% of GDP. The statement that accompanied the data release focused on the fact that this is a lower number than was originally estimated several months ago. Snow and Bolton point to this as evidence that Bush’s handling of the economy is working: deficits are falling, after all!

But they’re not.

Even with the “strong” growth this year that Bush typically touts, the budget deficit has gotten worse, not better. Last year’s deficit was only $377bn, or about 3.4% of GDP. So despite the “strong” economy, the deficit has grown in both absolute and relative terms.

Let me repeat that point, for those who are still unclear. The budget deficit has gotten worse, not better.

So I have a simple question for Messrs. Snow and Bolton: if the economy’s so strong, why has the budget deficit gotten worse?