Let’s not get too excited

The good news is that, due to swelling tax receipts, the federal government ran a temporary surplus last quarter – “Tax receipts exceed Treasury predictions - Early surge lowers deficit projections”

The Treasury Department this week reported there would be a $54 billion swing from projected deficit to surplus in the April-to-June quarter, after an unanticipated gush of tax payments poured into the Treasury before the April 15 deadline. That prompted private forecasters to lower their deficit projections for the fiscal year that ends in September.

Here’s the cold water in graf #13:

Also, by next year, costs from the new prescription drug benefit should start rolling in. By the end of the decade, pressure from the retiring baby boom generation will start pushing Medicare, Medicaid and Social Security costs up significantly.

Then came the smackdown.