RUSH: James Pethokoukis, who is a fellow at the American Enterprise Institute, published a blog post yesterday. I didn’t see it until last night after the program yesterday. “Is the US on the Verge of Running a Budget Surplus? — The US government ran a surplus of $112 billion in April 2013, according to the Congressional Budget Office, $52 billion more than a year ago. Now, April is usually a good month for the treasury thanks to income tax payments. Still, the surpluses recorded in April 2012 and 2013 were the first seen in that month since 2008.”
These are the first surpluses since Obama took office.
“More good news: Revenue for the first seven months of the fiscal year is up 16%, or $220 billion, from the year-ago period. To the number crunchers at Potomac Research, the combo of those surging revenues and the sequestration spending cuts points to a stunning possibility.” Are you ready? “[O]fficial forecasters will have to radically alter their projections this summer. The CBO forecast of $845 billion in red ink [deficit] this year, 5.3% of GDP, is hopelessly outdated; the deficit will fall well below 5% of GDP, perhaps to about $700 billion.
“Then the improvement really takes hold. Instead of the official forecast of a $616 billion deficit in fiscal 2014, we’d anticipate something like $500 billion, close to 3% of GDP. And in fiscal 2015, the deficit could drop below 2% of GDP, perhaps to $300 billion.” Do you understand? After we fully implement Obamacare, the deficit is maybe gonna disappear! Right in time for the 2016 presidential campaign. Obamacare is going to be seen as wiping out the deficit, creating all kinds of unexpected revenue flowing into Washington.
Now, these guys at Potomac Research finish their post with this: “Call us crazy, but if the economy finally lifts off in 2014-2015, with GDP growth in the 4% neighborhood — with the sequester still in place — a surplus by fiscal 2015 is not totally out of the question.” Pethokoukis: “With revenue coming in above expectations and spending below, the deficit numbers are turning out way better than expected. Merely a sharp drop might greatly influence the current austerity debate. … If the federal government runs an actual surplus…” This is Pethokoukis writing.
“If the federal government runs an actual surplus [in 2014 or 2015] few politicians are going to want to hear much about” deficit reduction or entitlement reform. There’ll be none of that. If we’re running a surplus, then everything is gonna be fine, and we’re gonna be able to spend even more money! “And not only might pressure mount to rejigger the sequester, but good luck to the Obama White House in getting any more tax hikes out of Congress,” because Obamacare and tax increases will be seen as the explanation for rising revenue and shrinking deficits.
Now, I remember making a prediction. It wasn’t really a full fledged prediction. I was just speculating, many, many moons ago, about the US economy and the American people. And when I speak about the American people, folks, I’m talking about you, those of you in this audience. I know how resilient you are, and I know that you people don’t just sit out there and take it. You’re gonna do what you can to overcome whatever economic obstacles there are, whether they are market oriented or placed there by government. You’re not just gonna sit there and take it.
The American economy is filled with ingenuity. It’s filled with creativity, and it’s filled with entrepreneurs. And at some point the American people will say, “To heck with this,” and they’re gonna start doing whatever they can to prosper, and they’re gonna do whatever they can to overcome whatever obstacles are there. And if that happens, we could see an economic rebound. I said this five years ago, four years ago, we could see an economic rebound and then guess what? Guess who gets the credit? Guess whose policies are gonna get the credit?
We ought to do a search of the archives of this program. I would like to know for sure just exactly when I first posed this possibility, ’cause it was quite a while ago. It was multiple years ago, at least three, and it was purely a political analysis, and it was based on the belief that the American people as I know them, and I’m talking about you, you people in this audience. I know who you are. You’re not waiting around for Santa Claus. You don’t wait for things to happen. You make them happen. I know exactly who’s in this audience. At some point you’re gonna get fed up with whatever the numbers are and you’re just gonna try to overcome ’em yourselves and you’ll succeed. But you won’t get the credit for it. Obama’s policies will.
Now, if you’re feeling rotten today, can you imagine how you’re gonna feel if all this stuff happens to be right? The fact that we’ve got a 17 or $18 trillion national debt will not matter, folks, it will not matter at all. If we ever get, while Obama’s still in office, to a budget surplus of even just one dollar, then you better get ready, because Obamacare will be credited, the stimulus will be credited, all of his jobs bills will be credited. The sequester, not so much, because that’s spending cuts. It will all be Obama’s policies have caused this growing economy with new money pouring in.
Obamacare and the stimulus and the home mortgage relief program, all of those things will get the credit if this actually happens, and these guys that are cited by Pethokoukis say that the timeline for this is 2014, 2015, right about the time that we’re all gonna be electing the next president. Just keep it in mind. I’m gonna search the archives, try to find out when I first posed this as a possibility. No, no, no, folks, folks, if all this happens, it’ll be in spite of Obama; it won’t be because of him. But that’s not gonna be what the story is, obviously.
RUSH: Ladies and gentlemen, I found it. I looked it up in the break. It was almost four years ago to the day, May 12th of 2009, where I first posited the notion that the economy would recover on its own, despite Obama, because of you, because of people like you who are not just gonna sit here and take it. May 12th of 2009 when I posited the idea that the people of this country will cause this economy to rebound, and guess whose policies will be credited for it?
Now, one other thing. James Pethokoukis has another post today in which he says that good economic news is bad news for the Democrats. The reason is they’ve been claiming that the sequester is killing the recovery. There is no bad news for the Democrats. That just doesn’t happen anymore. The low-information crowd, which still today can’t get enough of Jodi Arias, is not gonna put two and two together and get four, and they’re not gonna think anything of it even if they do. I think this is where people trip themselves up, “Boy, yeah, the Democrats, you know, they’re really gonna get killed. They’ve been out there claiming the sequester is bad, it kills the economy, kills the recovery, and now the sequester is contributing to a recovery.” Maybe in real world terms, but the Democrats aren’t gonna get criticized for this.
In fact, the sequester is going to be hardly mentioned when it comes time to start crediting the things responsible for a recovery. And notice we’re already talking about a recovery in the midst of this economy, which is still in the tank. All of a sudden now we’re talking about a recovery and a surplus in 2015? And people still can’t find the job they want. This is mind-boggling. But the idea that a recovery, that economic growth is bad news for the Democrats, with Obama in the White House? In whose world is that gonna happen? Is Dana Milbank gonna write a story, “Oh, man, this is really bad for the Democrats. Look at that, the sequester is causing the economy to recover at faster rates than anybody thought. Wow, the Democrats are in deep doo-doo.” That’s never gonna be written.
The Democrats are always vindicated by all facts. The Democrats are never wrong. The Democrats never make a mistake. The Democrats are always right. And right is always wrong. And wrong is always right. Even when they’re wrong it’s right, even for the wrong reasons. Now, in the old days, not too long ago, it might have been true that the Democrats bellyaching about the sequester, causing the recovery to come to a screening halt, just the opposite happens. They might have egg on their face, but that ain’t gonna happen now.
Just like, you know, Dick Morris was out there saying at the Benghazi hearings, “That’s it for the Obama administration, totally complete, that’s done. It’s over for them. Once the American people learn that their president is lying to them that’s it, that’s the end of the relationship.” They don’t have any idea he’s lying to ’em and they’re not going to be told that he’s lying to ’em. Benghazi’s over. As far as the low-information public in this country are concerned, it was a cheap political stunt by the Republicans that failed. The only thing that came out of it was a bunch of storytelling that might end up as a great movie someday. But that’s it, nothing to see here.
RUSH: Ladies and gentlemen, I’m not trying to depress you. Far from it, and I don’t think all is lost. I’m just telling you: Benghazi is what it is. It’s being portrayed exactly as we knew it would be. There was no way the media was gonna report this accurately, or even cover it. When it was over, there was no way that this was gonna lay a hand or a glove on Obama. It was never in the cards. It’s not gonna be an event like this that trips them up. It’s gonna be something totally surprising that you and I think is inconsequential and uneventful that’s gonna trip ’em up, if anything ever does.
On this economics business, I know there two stories in the New York Times that Jim Pethokoukis cites when he says that the good economic news is bad news for the Democrats. It really isn’t. There is no bad news for the Democrats, and this isn’t gonna be, either. But there are two stories. New York Times: “Economists See Deficit Emphasis as Impeding Recovery.” That’s the sequester. Everybody worrying about the deficit! Why, that’s just gonna get in the way of the recovery!
The National Journal: “Who Says Fiscal Policy Is Hurting the Economy? (Almost) Everyone,” and that’s the sequester. So you got two stories out there just whining and bellyaching about the sequester. I guarantee you, the New York Times and the National Journal do not know about this Jim Pethokoukis post. It’s the American Enterprise Institute; that’s a foreign country. But they’ll hear about it because I’ve talked about it.
They’ll learn that there are now projections for a surplus in 2015, and they’re gonna dump those deficit stories. They’re gonna dump those sequester-is-bad stories like a hot potato. By tomorrow, you won’t be able to find those two stories, and everything’s gonna shift now with this talk of a possible surplus in 2015 to the miraculous, wonderful ways of Obama’s policies. “It just took longer than people thought, because it was so much worse than anybody thought, because Bush didn’t tell the truth of how bad it was when Obama took over for him.”
I mean, this is so simple to lay out, your kid could do it. Your kid could write this scenario. “Surplus by 2015? Yeah, we thought it would happen by 2010 or 2011, but it was so bad, it was so much worse than even we knew. Bush really kept it secret how bad it was. I mean, the depression, the recession, the financial crisis, it was so much worse. It turns out that if Obama had a surplus twice as large as it was, why, it mighta happened sooner. If Obama had put Obamacare into play two years sooner, why, we would be two years closer to a surplus!”
That’s what’s gonna happen here — and then the lesson they’re gonna take from it is, “Government spending led to this recovery, and it woulda happened sooner if they woulda just spent more. Oh! And tax increases. We’ve raised taxes on the top 1%. So the tax increases and all this new spending? Pshew! Obamacare gave us a budget surplus. If we’da just raises taxes higher and sooner and spent more money quicker, we would be in Fat City now.” Lessons to learn for the next Democrat president, you see?
So that’s how it’s gonna play out, if indeed this surplus stuff happens. Now, that’s the big IF. Frankly, I can’t believe that. Honestly, I can’t believe a surplus, not with Obamacare being implemented. Look at all the people losing their jobs. Look at all the businesses shutting down. I don’t see how that’s gonna happen. But they’re out there hoping and praying. That’s what all these projections are about: Hoping and praying that we do end up there.
So they’re already setting the stage for it, just like in 2005 they started talking about a recession three years before it happened. The media started talking about it, trying to convince you that we were heading that direction, making it a self-fulfilling prophecy. The world was hating us ’cause of Iraq. Bush was horrible; people were dying. It was unnecessary, global warming and all that. For three years you were pounded with it. By the time it was over, you hated Bush. You thought America was hated.
We were in a recession because of Bush and the Republicans and all that, and there we go. The same thing’s gonna happen here on the upside. “We might be headed to a surplus because Obama’s policies are wonderful and great, but it shoulda been even bigger!” So a case has been made for raising taxes and spending. “Therefore we should never, ever even discuss again cutting taxes or cutting spending. That’s what gave us the recession: The Bush tax cuts.” I can see all of this with just that one report by Pethokoukis projecting a possible surplus in 2015. You wait. We’ll see.