Meanwhile, non-withheld revenues from lower-taxed capital gains and dividends are paying for themselves. Total tax receipts in 2006 will come in around $2.4 trillion, roughly $400 billion above the tax-collection peak of 2000.

The Congressional Budget Office may now acknowledge that deficit projections were $100 billion too high, but it maintains that only higher taxes in the next 10 years will solve the budget problem. This defies common sense. If it pays less to work and invest after-tax, as implied by the CBO scenario, does anyone truly believe people would work harder to expand the economy? If that were the case, then why not raise tax rates back to 70 percent, where Reagan found them, or 91 percent, where JFK first had them? The CBO's thinking begs credulity.

Yes, $3 gas at the pump has cut into the economic success story. Our biggest economic challenge has been higher energy prices, itself largely a function of the worldwide spread of capitalism and low tax rates that has led to strong global growth. But the heavyweight energy story could be lightening up.

At high prices and profits, market forces are generating more production and less consumption. For the first time in 15 years, the number of new oil wells drilled in the United States has surpassed the 1,000 mark. The rotary rig count is up 23 percent from a year earlier. Total exploration and development is 30 percent higher than last year. Unleaded gasoline futures have been dropping, suggesting relief at the pump.

Meanwhile, bond rates are coming down as the Fed removes excess liquidity to stop inflation. Mortgage rates are now declining, with Wall Street economist David Goldman noting that home prices actually increased slightly in the second quarter, after falling in the first. Much of the housing slack will be taken up by the highly profitable business sector, as resources shift from residential construction to a new boom in commercial and corporate building. Stock markets, by the way, continue to rise, and are within shouting distance of five-year highs.

All this is not to say that the president doesn't have a problem with the Iraq war. He does. But on the low-tax economy, Bush has the story right.

Low tax rates, strong economic growth and shrinking budget deficits -- it's still the greatest story never told.