2007 Business Review — Common Cents

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.

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