According to today's WALL STREET JOURNAL, our economy is doing very well. Since 2004, deficit spending has fallen by $251 billion, one of the most rapid three year declines in our history. The deficit as a share of the economy is down to 1.2%, about half the average of the last 50 years.
The IRS received a record $2.568 trillion in taxes in 2007, or 6.7% more than in 2006. Federal receipts have climbed by $785 billion since the 2003 investment tax cuts. Also, in fiscal 2007 the growth in federal spending was slower.
Unfortunately, this may not last. Congress is already planning to spend $35 billion in expanding the children's health program, $286 billion on a five-year farm bill, $23 billion in water projects and $22 billion in non-defense discretionary spending.
The best lesson here is that the best antidote for deficits is faster growth, not tax increases. The budget deficit has declined quicker in this decade after the Bush tax cuts than it did in the 1990's under the Clinton tax increases.
To quote Larry Kudlow, our economy is "The Greatest Story Never Told", and I thank him for trying to get the word out.
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