April 4, 2008: Victory-for-Growth Day?
The Monthly Treasury Statement, published yesterday, made the fiscal budget trends look even better than they did last month. At this rate, the unified budget would move into balance on April 4, 2008. Here’s the chart; click to enlarge.
I’ve decided to start calling it “Victory for Growth Day” (VG-Day) because if it happens, it would be a balanced budget achieved through economic growth instead of tax rate hikes. According to the doom peddlers, that’s supposed to be some kind of Walter-Mitty-style pipe dream, worthy of sarcastic ridicule and dismissal with a wave of the hand. [How long have they been saying “We’ll never grow our way out of it”? There’s probably some entertaining stuff along those lines at the Blue Dog Democrats’ web site, I bet.]
Last month, “VG-Day” was October 12, 2008, but that was based on the March ’06 MTS. The new April statement improved the deficit trend (tax receipts relative to outlays), and moved VG-Day earlier by six months. In other words, we might get to watch the deficit doom peddlers stutter like Porky Pig for seven full months of the 2008 presidential campaign—instead of just three weeks.
It’s still too early for me to call this my “prediction”; however, if these trends hold up for another eight or ten months, I will then go out on that limb.
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Technical notes:
I’ve received several emails asking how I’m generating the trends in the graphic above. It’s really pretty simple—and that’s by design, because I figured I’d probably get some questions about it. Each data point on the receipts and outlays lines is a 12-month total from the Monthly Treasury Statement; in other words, each point is a rolling fiscal year total. That deseasonalizes the data, which is critical for this kind of forecasting. After that, all I do is throw a straight-line trend off of the most recent twelve of those points on each line, then I figure out when the lines would cross. That identifies VG-Day, and this month’s trend lines point to April 4, 2008.
