duhhh ... US budget deficit grows at $2 trillion + annual pace !
(snip)"“It’s going to be real ugly,” said Scott Anderson, a senior economist at Wells Fargo & Co. in Minneapolis. “We have just seen a collapse in revenue, and expenditures are up. Given the bailouts and the stimulus packages, that is likely to continue.” Anderson projected the deficit will jump to almost $2 trillion this fiscal year.
Economists surveyed by Bloomberg News forecast a March deficit of $165 billion, according to the median estimate of 28 projections. Projections ranged from deficits of $137.3 billion to $200 billion.
During the first half of fiscal year that began Oct. 1, the country’s deficit swelled to a record $956.8 billion, compared with a $313 billion shortfall during the same period a year earlier.
Fewer Receipts
Corporate tax receipts totaled $56.2 billion through March, down from $129.5 billion in the first half of fiscal 2008, the Treasury said. Individual income tax collections are down 15 percent so far this fiscal year to $429.7 billion compared with $503.5 billion in the year-earlier period.
The deficit in 2008 totaled a record $454.8 billion. The Congressional Budget Office estimated on March 20 that the gap will swell to $1.85 trillion this fiscal year.
Almost half of the $94.2 billion, or 41 percent, surge in government spending last month compared with March 2008 reflected cash infusions to Fannie Mae and Freddie Mac, the two biggest mortgage underwriters. Fannie Mae received $15.2 billion last month and Freddie Mac got $30.8 billion, the government said.
The government spent $2.9 billion last month on its Troubled Asset Relief Program, the plan aimed at aiding banks, bringing the fiscal year-to-date total to $293.4 billion.
Obama Plan
President Barack Obama in February signed into law a $787 billion stimulus program that he pledged will preserve or create 3.5 million jobs. Since then, the administration has also committed funds to help U.S. automakers and to spur investors to buy real estate assets that are clogging banks’ balance sheets.
Obama has signed a $410 billion spending bill to provide funding for most government operations through Sept.30.
The U.S. House of Representatives and the Senate last week approved drafts of Obama’s 2010 budget that largely adhere to the administration’s priorities. The House approved a $3.55 trillion plan on April 2 that echoes Obama’s calls for revamping the health-care system, rewriting education policies and reining in global warming.
Obama said last week the U.S. needs to reduce its deficit after the economic crisis passes.
“Once we have stabilized the economy, we are going to have to bring these huge deficits down,” Obama told reporters April 2 in Baden-Baden, Germany.
In other categories, spending by the Social Security Administration rose 7.3 percent to $324.2 billion for the fiscal year to date; spending by the Department of Health and Human Services, which administers the Medicare and Medicaid health programs, climbed to $156.2 billion from $137.6 billion "(snip)
Re: duhhh ... US budget deficit grows at $2 trillion + annual pace !
and the rest of the world has noticed ...
(snip)excerpt below from last issue of The Privateer,
The Real US Bottom Line:
This week, the US Congressional Budget Office (CBO) projected that the US budget deficit will balloon to $US 1.8 TRILLION or 13.1 per cent of GDP this year. The Obama budget is $US 3.55 TRILLION. That means that more than half (50.7 percent) of the budget will be borrowed.
The Global Bottom Line:
All of the rest of the world sees this bottom line clearly. If the US budget were to be funded solely out of incoming tax revenues and therefore brought into balance, about $US 1.8 TRILLION in artificial “stimulus” would be withdrawn. The US economic and financial house of cards would instantly cave in.(snip)
Re: duhhh ... US budget deficit grows at $2 trillion + annual pace !
Quote:
Originally Posted by
Melonie
and the rest of the world has noticed ...
(snip)excerpt below from last issue of The Privateer,
www.the-privateer.com
The Real US Bottom Line:
This week, the US Congressional Budget Office (CBO) projected that the US budget deficit will balloon to $US 1.8 TRILLION or 13.1 per cent of GDP this year. The Obama budget is $US 3.55 TRILLION. That means that more than half (50.7 percent) of the budget will be borrowed.
The Global Bottom Line:
All of the rest of the world sees this bottom line clearly. If the US budget were to be funded solely out of incoming tax revenues and therefore brought into balance, about $US 1.8 TRILLION in artificial “stimulus” would be withdrawn.
The US economic and financial house of cards would instantly cave in.(snip)
Is that "house of cards" anything like the Sub-prime lending house of cards? You know...the one that caved in?
Here's a news flash...the house of cards already caved. Consider what Obama is doing as EMERGENCY FIRST AID, k? That puts it into better perspective. Like, emergency first aid for the WHOLE F'ing WORLD.
Re: duhhh ... US budget deficit grows at $2 trillion + annual pace !
Quote:
Is that "house of cards" anything like the Sub-prime lending house of cards? You know...the one that caved in?
Actually, this house of cards is a lot bigger and would directly affect a lot more areas of the domestic and world economy. Imagine the effects if every insurance policy and retirement annuity was suddenly 'worthless'. Imagine the effects if the 'purchasing power' of the US dollar is suddenly cut in half ( with instant doubling of food prices, gasoline / energy prices, prices of almost every product on the shelf at WalMart ). Imagine the forced sales of US dollar priced stocks and bonds ( and the resulting effect on their market values) as international investors attempt to quickly pay off the 'carry trade' loans they took out in Yen or Euros to buy those US dollar priced investments in the first place (i.e. the falling US dollar increases their Yen or Euro denominated losses).
Also you might want to consider the effect on international commerce of a 50% US dollar devaluation. For example, instead of it's current value of US$0.80, imagine that the Canadian dollar is suddenly worth US$1.60. This would mean great bargains for Canadian shoppers in US shopping malls. However, it would also mean that virtually every Canadian export product would become unaffordable for US buyers, which would very quickly translate into widespread Canadian unemployment !
Re: duhhh ... US budget deficit grows at $2 trillion + annual pace !
Quote:
Originally Posted by
Melonie
... “Once we have stabilized the economy, we are going to have to bring these huge deficits down,” Obama told reporters April 2 in Baden-Baden, Germany. ...
Right, and how is that going to happen. Hrm, will it be a cut in spending or an increase in taxes. Let's take a guess. ::)
Re: duhhh ... US budget deficit grows at $2 trillion + annual pace !
Quote:
Originally Posted by
hockeybobby
Is that "house of cards" anything like the Sub-prime lending house of cards? You know...the one that caved in?
Quote:
Originally Posted by
Melonie
Actually, this house of cards is a lot bigger
Yup. The sub-prime was merely a ripple, not the wave.
Re: duhhh ... US budget deficit grows at $2 trillion + annual pace !
and more from www.the-privateer.com:
"This is it, right out of a Bloomberg article reporting on the G- 20 Summit in London: "The leaders said today that they would 'deliver the scale of sustained fiscal effort necessary to restore growth' while ensuring sustainable budget deficits and price stability in the long term. ... the G-20 promised 'to take all necessary actions' to restore the availability of credit and to protect major institutions."
Please re-read the above and then consider the following facts. In the year to April 2, 2009, the funded debt of the US Treasury has risen by $US 1.67 TRILLION. In the six months since the start of the 2009 fiscal year, the rise has been $US 1.1 TRILLION. Over this fiscal year, the US government (see the Global Report) will borrow MORE THAN 50 PERCENT OF ITS SPENDING REQUIREMENTS!
The next time you read a quote to the effect that your government will do "whatever is necessary" to restore your nation to "sustainable economic growth", simply translate the phrase to - "whatever we can get away with." Any government or nation which is serious about squirming out from under the global financial crisis will do what the German government did in 1948. It will not impose more rules, but remove them. It will not print more money, but reform money. It will not increase borrowing, it will cut spending. Most important of all, it will simply get out of the way. No miracles necessary."
Re: duhhh ... US budget deficit grows at $2 trillion + annual pace !
again, from the Privateer:
"Absurdity In Action:
This one is even too far fetched for Ripley’s “Believe It Or Not”. Last month, Bloomberg put the total
cost of the many US bailouts so far at $US 9.7 TRILLION. That’s enough to hand each US household a
check for around $US 92,000, or to pay off 90 percent of home mortgages in the country! Since then, the
tally of US bailouts has climbed to $US 11.9 TRILLION! This is complete fiscal and monetary madness."