America's economic future

Bizzyblog shows what many newspapers have not: that our deficit has plunged 62% over the last four years.

And he talks of the future, as well.

Now for some cold water: I hope I’m wrong, but I believe that the long run of increased tax receipts is over, and that receipts in future years will go up by no more than 4%-5% annually — if we’re lucky. That’s because none of the economy-prodding suggestions made at the end of this post last year have been put into place. The current Congressional majority has no interest in making the Bush 2001-2003 tax cuts permanent. If that were miraculously to happen, the economy would likely go into orbit at the sudden rush of bi-partisan sanity. But that makes too much sense.

If, as appears likely, the Bush cuts are instead allowed to expire at the end of 2010, that will in reality represent a huge tax increase after seven years of a mostly-static tax structure. Worse still, a Democratic presidential victory in 2008 could not only mean a probable earlier end to the Bush cuts, but steep additional taxes on top of that. All three major Dem candidates have already promised exactly that.

Because of these things, it would not surprise me in the least that investors and corporate managers considering expansion are becoming more cautious, hindering current economic growth.

What’s really needed, as I’ve suggested several times in the past few months, is another tax cut. It would nice to hear at least one GOP presidential candidate talking about that, and not merely holding the line on the Bush cuts.

Check it out.