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What is your reason for hoping the budget moves to balance before the election?
Also, it appears the chart for both outlays and receipts are looking more parabolic than linear. What would the extension of each graph look like if you applied a rate of change to both?

The February archived deficit watch projected a balanced unified budget by June 2008.


Nine months later the balanced budget projection has been extended to August 2009.

Not a good sign and growth in revenues is decelerating.

That's why exponential moving averages are better predictors than simple moving averages.

Corporate profits will always mean revert and the financial sector which accounts for about 25% of corporate earnings will be a drag on government revenues until the credit crunch finally plays out many quarters in the future.

Unemployment is increasing, the labor force participation rate is declining, personal taxes paid by labor is decelerating, health care is exploding.

My WAG: When the February 2008 monthly Treasury Statement is published in March, the deficit watch will be abandoned by this blog as the budget will not be in projected balance for at least 2.5 years.

The next couple of months might look pretty ugly as the banks "write off" their sub-prime exposure; but, the numbers COULD turn around nicely after the first of the year.

Also, we could get a little help from a "continuing resolution" situation, and a troop drawdown in Iraq.

I don't think we'll come close to "balance" in 08, but we will probably drop below 100 B.

Understand what you are saying from a populace voting issue but surpluses, deficits and balanced budgets do not bother me it is the government spending that has not slowed down.

I apply the growth rates to the most recent points; that's why they're not exactly straight. And the reason I'd like to see it before next election is it would neutralize an issue that is easy and frequently demagogued.

The projection method doesn't matter much; nine months ago the subsequent drop in corp income tax receipts would have been unforecastable in any case. And, Q4 might drop to the 1.5% growth range, but count on that to stay low into '08 just yet.

The monthly deficit watch will continue as long as this blog lasts.

Menzie Chinn has an interesting chart tracking St Bill's and St GW's pay down of the deficit. Charts are synchronized to the business cycle so that we can compare, as much as possible, the same time frames in their respective business cycles. See Figure 3 here: http://tinyurl.com/2jljvt

growth in gross intrest payments is since april 2005 higher than the growth rate of GDP. To change that the only thing to do is to tax the GDP by a higher prestage.

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