Donald Lambro

If this is the winter of America's discontent, our troubles are largely overseas where the Iraq war overshadows so many positive, even breathtaking advances here at home.

None of the really good news received much attention last week, at least on the nightly news shows that focused on the war and the vicious Arctic weather that engulfed much of the nation. So perhaps this is as good a time as any to warm our collective hands on what else was happening.

Federal Reserve Chairman Ben Bernanke gave the U.S. economy a clean bill of health without the usually gloomy caveats. Wall Street remained in the midst of a Bush rally that was pushing the Dow to new records almost daily, fattening middle-class 401(k)s and IRA pension funds in the process. The S&P 500 was trading at its highest level in six years.

Meantime, oil was falling into the $57-a-barrel range, signaling cheaper gas prices, and the federal-budget deficit was dropping sharply, without raising taxes as the Democratic presidential candidates are proposing to do if they win back the White House in 2008.

Bernanke's testimony before House and Senate committees must have been especially welcomed at the White House, as it was by the financial markets here and abroad. The economy was growing nicely, and it would continue to expand at a moderate rate this year and next, he said.

Inflation appeared to be within a tolerable range, too, a stronger signal that the Fed has no plans to raise short-term interest rates that sent a huge collective sigh of relief through the markets and the business community.

Contrary to all the worrying and hand-wringing over the budget deficit from Democrats and insecure newspaper pundits with too much time on their hands, Bernanke said he expected deficits to continue their sharp decline this year and next.

This remains one of the major, underreported success stories of the Bush administration. After all those nightmare scenarios about the nation being plunged deeper into a sea of red ink because Bush had the temerity to cut taxes, well, just the opposite is occurring.

Last year, the projected deficit was essentially cut in half as a result of an explosion in tax revenues from healthier corporate profits, more capital gains and millions of workers being put on the nation's payrolls.

The deficit in the first four months of the fiscal year has fallen sharply "as the government continues to benefit from record levels of tax collections," the Associated Press reported last week. Indeed, tax revenue coming into the Treasury from October through January was up by nearly 10 percent from the same period a year ago.

Donald Lambro

Donald Lambro is chief political correspondent for The Washington Times.