Conservative AEI: Whoa! Is The US On The Verge Of Running A Budget Surplus?

The conservative American Enterprise Institute says April’s surplus of $112 billion could be a portent of things to come.

[This surplus is] $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. More good news: Revenue for the first seven months of the fiscal year is up 16%, or $220 billion, from the year-ago period.

AEI quotes Potomac Research, which says:

…official forecasters will have to radically alter their projections this summer. The CBO forecast of $845 billion in red ink this year, 5.3% of GDP, is hopelessly outdated; the deficit will fall well below 5% of GDP, perhaps to about $700 billion.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.

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.

By: MR. RIGHT