Budget Scare Stories

Dean Baker

November 07, 2006

Dean Baker is the co-director of the Center for Economic and Policy Research. He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer.

Budget numbers can be complicated. Politicians exploit this fact to mislead the public about their successes and their opponents’ failings. Foremost in the former category is President Bush’s effort to tout the decline in the budget deficit over the last two years as evidence of the success of his tax cuts.

While the budget deficit has fallen by almost $200 billion (or 1.4 percent of gross domestic product) in the last two years, this is a normal cyclical pattern (deficits fall when the economy recovers), not evidence of the success of Bush’s tax cuts.