May 04, 2004

Budget Good News Watch

We could end up seeing a remarkable turnaround in budget numbers. Based on actual payments to the treasury, Citigroup has just put out a new study estimating that the budget deficit will be $377B, down from an OMB (White House) peak estimate of $521B. That's likely to put a crimp in the supply of new Federal Government bonds and ease the feared upward pressure on interest rates. We'll see how things go but we may have just turned the corner on the vicious circle of recession and started a new virtuous circle of improving economic news turning into improving tax receipts and improving government budget numbers, freeing up more cash for more investment and more job creation.

HT: Instapundit

Posted by TMLutas at May 4, 2004 01:44 PM