U.S. Federal Budget FY 2008 Summary:
This summary guides you through the FY 2008 Federal budget, including:
- Assumptions about U.S. economic growth,
- Revenue projections,
- Discretionary and mandatory spending proposals, and
- The impact of deficit spending.
Assumptions About the U.S. Economy:
The FY 2008 budget was based on assumptions about the U.S. economy and trends for the future. These assumptions were outlined in the Economic Report of the President - FY 2008. It had an excellent discussion of key economic trends.
However, an important issue that wasn't discussed was the U.S. debt. There was no mention made of the Inverted Yield Curve, which was a clear signal of the impending recession.
FY 2008 Budget Revenue Projections:
Three questions must be answered to determine whether the revenue projections were realistic:
- Were the GDP forecasts realistic?
- Were revenue projections accurate?
- Did the budget postpone a revenue crisis?
The revenue projections did not address the impact of the Alternative Minimum Tax. The budget also (correctly) assumed the continuation of the EGTRRA and JGTRRA tax relief acts. These were, in fact, extended by Congress in 2010.
FY 2008 Budget Spending Proposals:
Most of the budget debate in Congress was about FY 2008 spending.
The FY 2008 Federal Budget - Military Spending reports on the request for huge increases. Spending needs for FY 2009 and beyond were not really addressed.
The military budget was part of the FY 2008 Federal Budget - Discretionary. The non-military portion of discretionary spending was projected to decline over the next five years, which would significantly impact certain segments of the U.S. population.
FY 2008 Federal Budget - Mandatory Spending describes the huge impact Social Security will have on the U.S. economy over the next 30 years.
FY 2008 Deficit Spending:
The FY 2008 Federal Budget forecast a balanced budget by 2012. The recession made sure this would not happen. Find out the issues surrounding the U.S. Federal Budget Deficit and why it's been so difficult to erase.
Background Reading:
To help understand the U.S. Federal Budget, the following may provide good background reading:
