Trade and Budget Deficits Are Down, But…
By Justin Gardner | Related entries in EconomyInstapundit points out that deficits are being driven down.
First, our budget deficit is looking slimmer.
Based on revenue and spending data through June, the budget deficit for the first nine months of the fiscal year was $251 billion, $76 billion lower than the $327 billion gap recorded at the corresponding point a year earlier.The Congressional Budget Office estimated last week that the deficit for the full fiscal year, which reached $412 billion in 2004, could be “significantly less than $350 billion, perhaps below $325 billion.”
This is mostly due to increased corporate tax revenue. What does that mean? Business is starting to boom again. And with the latest unemployment numbers dropping to 5%, this signals good news for the average American.
And then our trade deficit is narrowing.
WASHINGTON (Reuters) - The U.S. trade deficit narrowed unexpectedly in May to $55.3 billion as exports rose slightly to a record and imports retreated a bit from the record set in April, a U.S. government report showed on Wednesday.
However, Instapundit leaves out one key fact about the trade deficit.
Despite the unexpected narrowing in May, the annual trade deficit remained on track to exceed last year’s record of $617.6 billion.The wide trade deficit has been a weight on the dollar over the past several years and currency analysts reckon the imbalance could yet push the dollar back into its long running decline.
Details Glenn!
This entry was posted on Wednesday, July 13th, 2005 and is filed under Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
July 14th, 2005 at 12:28 am
The Trade Deficit is over rated as an issue — usually it’s fully balanced by a combination of currency adjustments and foreign investment. Meaning China, Japan, Korea, & Taiwan are holding huge US reserves, and if the dollar declines too much, too fast THEY lose tons of money.
And THEY lose their export-oriented jobs (to which they are addicted to about as much as the US is addicted to lowest price mass quantity consumption.)
July 14th, 2005 at 10:17 pm
I agree with Tom. They send use goods, we send them pieces of paper. I do not see a problem.