THE WEEK

Tip O’Neill says Ronald Reagan shouldn’t advocate prayer in the public schools unless he starts going to church more often. Fair enough. And we say the Speaker shouldn’t talk about hunger until he gets down to 160 pounds.

Some economic commentators would have it that the spectacular boom we are now enjoying (700,000 new jobs in February alone) is due to the stimulative effects of the federal deficit. But the truth is that the deficit peaked nearly a year ago and has been coming down steadily ever since. On a month-by-month annualized basis, the deficit rose to around $235 billion last May and has been trending sharply downward since then, falling to an annual pace of $142 billion in January. Tax revenues are pouring into the government’s coffers faster than anticipated, according to a report in Business Week, with corporate tax receipts running 55 per cent higher than last year. More remarkable, federal spending is not rising as fast as expected. Most of this progress in closing the deficit is due to economic growth—growth that could come to a halt if Congress passes a big tax hike as a “deficit-reduction” measure.

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Tip O’Neill says Ronald Reagan shouldn’t advocate prayer in the public schools unless he starts going to church more often. Fair enough. And we say the Speaker shouldn’t talk about hunger until he gets down to 160 pounds.

Some economic commentators would have it that the spectacular boom we are now enjoying (700,000 new jobs in February alone) is due to the stimulative effects of the federal deficit. But the truth is that the deficit peaked nearly a year ago and has been coming down steadily ever since. On a month-by-month annualized basis, the deficit rose to around $235 billion last May and has been trending sharply downward since then, falling to an annual pace of $142 billion in January. Tax revenues are pouring into the government’s coffers faster than anticipated, according to a report in Business Week, with corporate tax receipts running 55 per cent higher than last year. More remarkable, federal spending is not rising as fast as expected. Most of this progress in closing the deficit is due to economic growth—growth that could come to a halt if Congress passes a big tax hike as a “deficit-reduction” measure.