This is the second in what will be a series of posts about the year’s major business stories (not as reported by the media):
Decrease in the Federal Budget Deficit
For the third consecutive year there was a large decrease in the federal budget deficit.
At the completion of fiscal 2007 the deficit had dropped 60% when compared to fiscal 2004. As such, for obvious reasons, the deficit morphed from that of front-page news to small margin notes or not at all reported. As a percentage of GDP, today’s budget deficit is much lower than the prevailing deficits of the 1970’s, the 1980’s, and the early to mid-1990’s.
The reduced federal budget deficit is a function of three things: (1) the general business/economic cycle, (2) restrained non-military spending by the 2005-2006 GOP Congress, (3) multiple tax cuts enacted by GOP Congresses from 2001-2006.