Remember That Bush Promise To Cut The Deficit In Half?

Bush made that promise back in July 2003.

Today's news:

The U.S. trade deficit soared to an all-time high of $725.8 billion in 2005, pushed upward by record imports of oil, food, cars and other consumer goods. The deficit with China hit an all-time high as did America's deficits with Japan, Europe, OPEC, Canada, Mexico and South and Central America.

The Commerce Department reported Friday that the gap between what America sells abroad and what it imports rose to $725.8 billion last year, up by 17.5 percent from the previous record of $617.6 billion set in 2004.

Maybe he meant by the end of 2006? Or maybe he was reading the number upside-down. The White House claims they are still "on track"... for 2009!

"...we are still on track to cut the federal deficit in half by 2009."

UPDATE: The really bizarre thing is that Bush only ever thought he would be able to halve the deficit because all that Iraqi oil would be flowing into his coffers... Turns out the increasing cost of oil worldwide is arguably "the most important factor" in the deficit's continued rise.

Ironique, n'est-ce pas?

As the NYT points out, the $725.8 billion gap is almost exactly twice the deficit in 2001. And US imports are now one and a half times bigger than US exports. What does that mean?

That means the country will have to rely on the flow of billions of dollars in foreign money, particularly from central banks in Asia, into American financial markets for some time to come. China and Japan are the biggest holders of United States Treasury bonds. Their purchases help finance the federal budget deficit and allow Americans to buy homes with cheap mortgages and to consume large quantities of imports, many of them from Asia.

Many economists believe that situation is unsustainable in the long run and the United States will eventually face a harsh correction that would depress consumer spending, increase the cost of borrowing and result in a weaker currency.

And for all you red-blooded GOP Commie-haters out there, guess what? Your deficit with China is now the USA's largest, at $201.6 billion.

Ironique, n'est-ce pas?