The Deficit
The Skeptical Optimist: The Disappearing Deficit
The chart shows that the deficit has been shrinking for the last two years. If (…and it’s a big “if”…) the economy continues to grow at the same robust pace, the deficit will disappear within 3-5 years, depending on how big the Katrina spending effect turns out to be.
A balanced budjet in 2008, while not a certainty seems to be a real possibility. That would put Democrats in a tough political position. While ’starve the beast’ seems only marginally successful at best, I do expect that deficit size does have some effect, and as it shrinks desires for additional spending will increase, so I doubt we will see a balanced 2008 budget.
It is probably also fair to acknowledge that while I think overall economic performance will continue to do well, keeping up with the growth of the past couple of years may prove difficult.
Read the rest of Skeptical Optomist’s post though, he certainly has more expertise on such matters than I do.



The real challenge, if we can balance the books by 08 will be capping the Democrat’s own spending. Since they have a stake in the goverment, they are able to undermine efforts to work the Republican Way.
It will be a hard fight to curb spending enough to balance the budget wilst keeping the wolves at bay…