by Calculated Risk on 3/28/2006 12:43:00 PM

Joshua Bolten, the Master of the Budget Disaster on July 14, 2005:

"The U.S. budget deficit is falling, and it is falling fast."

Meanwhile back in the real world, the US General Fund deficit will set a new record this year of close to $600 Billion. More Bolten:

"...the budget deficit is forecast to continue to fall, to $162 billion in 2009, or 1.1 percent of GDP - less than half the size of the average deficit over the last 40 years."

This statement isn't just wrong, its dishonest. Until about 20 years ago, the Unified budget deficit and the General Fund deficit were about the same size. When Reagan (following the advice of the Greenspan Commission) upped the SS payroll tax, SS started running huge surpluses. These surpluses are not included in the General Fund. But Bolten is using the Unified Budget - and masking the General Fund deficits with SS surpluses. Over a period of 40 years Bolten should be comparing to the General Fund deficit as a percentage of GDP, not the Unified Budget deficit. That is dishonest.

Besides, Bolten was also wrong. The way things are going, the US might have a $1 Trillion General Fund budget deficit in 2009 (probably more like $800 Billion).

Boltie, you're doing a heck of a job!