We can’t remember the last time we saw the estimate for the annual deficit lowered. Next week The White House will report that it now estimates this year’s deficit will be $1.58 trillion, $262 billion lower than its last best guess.
The reason? It’s weird. They say there will be fewer bank failures and bailouts than they had previously factored in. This is particularly odd given the spate of significant failures, and the ongoing struggles of the FDIC to keep up. Perhaps they were figuring on another one or two Big Ones going down, which now seems like a remote possibility.
Of course, $1.58 trillion is still a record deficit by a long shot. We’d feel a little more comfortable about our fiscal position, if the estimate were to be lowered due to a surprise increase in receipts.
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