Deficit Over $1 Trillion

[Alex Linder]

With deficit topping $1 trillion, what does it all mean?

By Martin Crutsinger

07/13/2009

Washington » In a year of eye-popping numbers, add one more. The government's annual budget deficit has topped $1 trillion, intensifying fears about higher interest rates, inflation and the strength of the dollar.

And with three months left in the budget year, it will get even worse, with the Obama administration projecting $1.84 trillion, four times the size of last year's deficit. Last year's number was the all-time leader at the time, at $454.8 billion -- a figure that now seems rather puny in comparison.

The soaring deficit is making Chinese and other foreign buyers of U.S. debt nervous, which could make them reluctant lenders down the road. It could also force the Treasury Department to pay higher interest rates to make U.S. debt attractive longer-term.

"These are mind-boggling numbers," said Sung Won Sohn, an economist at the Smith School of Business at California State University.

Here are some questions and answers about what happened to the federal budget, which began the new century with the longest string of surpluses in seven decades.

How did we go from a string of four consecutive surpluses from 1998 through 2001 to the fix we are in now?

The surpluses at the end of the last decade reflected a boom-time economy, which was enjoying the longest uninterrupted expansion in U.S. history.

When the last recession began in 2001, that cut into revenues. Then the government's budget picture darkened even further after the 2001 terrorist attacks as government spending was increased to pay for wars in Afghanistan and Iraq.

But weren't things getting better at the end of the Bush administration?

Until President George W. Bush's last year in office, the deficit had been shrinking, hitting a five-year low of $161.5 billion in 2007. But that was followed by the record deficit of $454.8 billion in 2008, the budget year that ended on Sept. 30 of last year, before the election.

Two things happened to make the deficit balloon. The country was hit by a severe recession that began in December 2007 under Bush, and then those troubles were compounded by the worst financial crisis in seven decades, which struck in fall 2008.

Isn't it unusual for the budget deficit to deteriorate so much in such a short time?

The size of the deficits this time around are unusual, but that reflects the unprecedented response the government has brought to bear to deal with the economic crisis. First, in 2008, Congress created a $700 billion financial rescue fund that had been requested by the Bush administration, and then early this year Congress approved President Barack Obama's request for a $787 billion economic stimulus bill to jump-start growth.

Is that all that is going on with the deficit?

No. Government spending also is being driven higher by what economists call "automatic stabilizers." That is spending that automatically occurs in times of economic troubles to help cushion the shock of a downturn.

The government is spending billions on such things as food stamps and unemployment compensation for the millions of workers who have lost their jobs. In all, government outlays are up 20.5 percent.

Does that explain all the red ink?

There is one more factor at work. Government revenues have fallen by 17.9 percent in the October-to-June period, compared with a year ago. That reflects the severity of the recession, the longest downturn in the post-World War II period. That has meant millions of people losing their jobs -- and thus not paying payroll taxes into the government's coffers -- and a big drop in corporate tax collections, as well.

How does this year's projected deficit rank with other periods in history?

Without a doubt, the deficit will be the largest in dollar terms, but it won't be a record in relationship to the overall economy -- the comparison preferred by economists.

The Congressional Budget Office is forecasting the deficit will equal 13 percent of the total economy, surpassing the record of recent years -- 6 percent achieved in 1983, during the Reagan administration -- but far below the 1943 deficit, which was 30.3 percent of GDP. That deficit reflected the massive spending undertaken to fight World War II.

What is the deficit outlook going forward?

Economists say it is OK to run massive deficits to stabilize the banking system and get the economy growing again. But they are fearful that the administration and Congress will not do enough to get future deficits under control, despite Obama's pledge to cut the deficit in half by the end of his first term in office.

They warn that the administration and Congress need to get more serious about attacking future deficits once the economic crisis is past. They argue that the only way that can be done is through some combination of spending cuts and tax increases to placate foreign investors.

http://www.sltrib.com/business/ci_12829380

[Alex Linder]

Yet we still have people on here who want government running health care.

[Alex Linder]

What government should be doing is contracting: dissolving departments. Declaring victory/apologizing/whatever - and going home. That won't happen as the government will function until its last creak as a whitemoney extraction machine. After that, it's back to nigger normal.

[OTPTT]

Yet we still have people on here who want government running health care.

'Worse is better' Alex and I can't imagine a more dire situation than having the feds involved with my health care. At least to the extent that they aren't already.

I'm not in the worse is better camp although it would appear that the feds trying to fund everything under the sun would bring an end to this Satanic system much quicker than the Republican road map. I'm in the preparation is the best policy camp and try to stay out of the crossfire if possible.

I may have read it here but recently saw where the Obongo administration has spent more debt in the last six months than the previous presidents of the last thirty years.

[Alex Linder]

'Worse is better' Alex and I can't imagine a more dire situation than having the feds involved with my health care. At least to the extent that they aren't already.

Yes - I always say it wrong. I should say

There are still people on here who want government to take over the rest of health care.

[Rick Ronsavelle]

People with toothache are resorting to pulling their own teeth because they cannot find a NHS dentist, a study out today says.
Have your say: Have you had trouble finding an NHS dentist?
Telegraph TV: DIY dentistry is on the rise

Almost a fifth of those questioned in the biggest patient survey of its kind said that they had missed out on dental work because of the cost.

Dentists in NHS 'can earn up to £128,000'
NHS dentists can cost more than private
Rise in children admitted to hospital with rotting teeth
Young children 'should not have fillings' say dentists
Dentists paid extra for treating more NHS patients, under new proposals
'More than 22,000 admitted to hospital for dentistry'


The research, involving more than 5,000 patients in England, also found that as many as six per cent had treated themselves because they could not find a dentist.

Some said they took out their own teeth or fixed broken crowns with glue. One person in Lancashire had carried out 14 separate extractions with pliers.

http://www.telegraph.co.uk/news/uknews/1566241/Sufferers-pull-out-teeth-due-to-lack-of-dentists.html

[Alex Linder]

Waiting lists and widespread misery are inevitable in any government-run system.

[Myles]

Yet we still have people on here who want government running health care.This government shouldn't be running shit. State health care in an all-White government ran by White men might not be a bad idea.

[Alex Linder]

This government shouldn't be running shit. State health care in an all-White government ran by White men might not be a bad idea.

Yes, it would. It has nothing to do with race.

[Alex Linder]

48 Million
June 16, 2009

The latest figure is 48,000,000. Not dollars. Not the unemployed. Not the deficit. 48,000,000 Americans who are uninsured. No medical insurance. Now, isn't that terrible? Doesn't it give one nightmares? Funny, but I can sleep at night in spite of the figure. Obama and his Democrat stooges plus probably a lot of Republicans also, will take care of that pretty quickly, I am sure. They've been trying for decades. We'll all wake up one morning and find that everyone has free medical care. After all, how can the Democrats and lots of Republicans stay in those offices, unless they vote to give everyone free medical care? They'll do it, as sure as the sun will rise tomorrow. The fiction is that when government runs things, they will be cheap and efficient. The exact opposite happens to be true.


In spite of the hideous repercussions, and economic disaster, they'll vote for it. Stop and think about it for a minute: First of all, when something's 'free,' everyone will want all they can get. That's why the budget of fire departments has gone through the roof. They forcibly bought out all the for profit ambulance companies, and made it 'public medicine.' Happened right here in my town too, and the fire department budget more than tripled. Do they collect for all those red ambulances, with sirens screaming, rushing here and there? Of course not! Us taxpayers pay for all 'public medicine.' If there is a fender-bender, here comes the public medicine wagon, on my tab. Offer anything 'free,' or paid by the taxpayers, and the use is constant, and to the limit of available services.


Yesterday, in talking to doctors, Obama tried to swoon them with complacent gibberish that he wasn't talking about 'socialized medicine,' but that's exactly what he is talking about. He, and his Democrats, want medicine free to everyone, on my tab, and we all know it. Even his so-called 'plan,' according to the Congressional Budget Office (CBO), will cost a trillion dollars a year. He says he'll pay for it with 'efficiency and fewer tests.' Nonsense, but that's not the main point here, which I haven't (as usual) heard anyone talk about.


With 48 million new partakers of free medicine, may I ask who will take care of them? Currently, most doctors are booked to their absolute limit, and I'll guarantee you that if the 'plan' is put into operation, thousands will conveniently retire. As it is, many docs won't take Medicare and Medicaid patients, because the pay is so bad. Currently, hospitals are going broke because of all the freebies they must accept. Where are the hospitals who will care for 48 million more patients? I know a chiropractor who will take no insurance, Medicare, or Medicaid patients, as he doesn't want to hire one or two to do the paperwork, and then get underpaid anyway.


What's happened to the health care system already, thanks to politicians who needed the votes to stay in office, has been to virtually destroy it. If public medicine for the elderly hadn't been legislated in the first place, we'd have thousands fewer nursing homes, far more responsible people, and a healthy system, which we had before public medicine. If hospitals weren't forced to treat everyone freely, there'd be more hospitals and healthier ones that are left. "Public" anything, be it rest rooms, housing, or anything else, are not desirable, plus are very expensive. All the bailouts have been a total waste of fading dollars.


Every single 'plan,' promulgated by the D.C. Gang, no matter what, has resulted in disaster and unbelievable costs, cloaked under the mask of 'humanity,' 'help the poor,' or other such nonsense. The way to help the poor is to give them a job. The way to help the poor is to close the borders. The way to help the poor is to allow them to make their own way or die, which is what they always did before government intervention. Now, they are not only poor, but lazy and criminal, we are over run with them, and they have bankrupted us. The process will continue till we are a third world nation, which we are approaching as I write this.

Obama's economic knowledge is pitiful, or he is literally trying to make us into a communistic, socialistic nation. The more government there is, the less we will prosper. The higher taxes there are, the less we will prosper. The more dollars that are printed, the less we will prosper. Prosperity does not come from huge government. Good health, happiness, and prosperity, comes from persons caring for themselves and depending on themselves, their parents, and church maybe, but not government or its handouts.

http://www.coloradogold.com/archive/48_Million-868.html

[Alex Linder]

America's Biggest
June 18, 2009


Do you admire a bank that has the most branches, the company that sells the most widgets, or the largest pizza chain in the world? Ah! To be the biggest! I actually don't like the biggest in anything. I like the small, individually owned restaurant, the individually owned bank with a five star rating, and the smallest of anything, which is usually privately owned, and is anxious to serve. But this is about the biggest in America, not the smallest.


The largest employer in America, is the federal government, and the numbers are growing by the hour. As of a few days ago, the number was 1.8 million. Even GM at its height, only employed 1.7 million. As the 1.8 million federal employee numbers grow, the private, for profit industry payrolls go down. As the for profit industry employment declines, fewer taxes are paid by private industry employees. States, cities, towns, and counties are going bankrupt as tax collections diminish. As property values plummet, thanks to the federal government's actions, layoffs by the thousands, and extreme hardship reigns over the land. Words writ cannot adequately express my deep sorrow and outrage, as government grows like Topsy, and commits one outrage after the other. Hundreds of fed employees are raiding people's homes if they own Indian artifacts, just as a current example.


In my small town, there are 150 phone listings for the federal government. A southern university figured that there are 1300 separate federal bureaucracies as of 2007, but I am sure it's higher now. Obama is creating new bureaucracy after new bureaucracy, as fast a hen lays an egg, or more often maybe. Regulations and more regulations, because you see, we are too stupid to regulate ourselves. Look at the total meltdown we are experiencing, and see why it all happened. Is it GM or Ford's fault that they are in trouble? Is it home builders' fault that they overbuilt, have gone bust, and laid off hundreds of thousands? Whose fault is it that mass layoffs, mass bankruptcies, mass foreclosures, and problems exist in every sector of the economy? Is it the Union Pacific's fault that they have laid off tens of thousands, and have locomotives, and tens of thousands of freight cars idle? Did they do something wrong? It is not any of their faults.


The federal government, and the Federal Reserve, at the urging of Democrat Congressmen as well as Republican and Democrat Presidents, did everything in their power to literally throw hundreds of billions of dollars into the economy. Money was so cheap and plentiful, that as Ludwig von Mises said, as he described economics, "People Act." People did act. They built houses, and sold them to unqualified people who were given money to buy. Government backed agencies like Fanny and Freddy accepted shoddy credit ratings from buyers, and forked over money by the bucketsful. Appraisers got into the act, as did mortgage brokers, who made a lot of dollars qualifying unqualified buyers. No one seemed to be checking credit ratings or employment status. It was a big, gigantic party. Housing's crash, and subsequent crash of everything else, was the direct fault of Uncle Sam and his Federal Reserve, Fanny Mae, and Freddie Mac. When housing crashed, as it had to crash, it took the rest of the economy with it.


Now, the outfit that caused this, is the largest employer in America, and is growing like a weed in a cabbage patch in July. The outfit that caused this, due to utter greed and stupidity, is now going to run auto manufacturing, banks, cigarettes and insurance? They are going to give us health, and see to it that the banks or financial institutions don't make any more mistakes? The mistakes made, were as a result of the Fed literally spewing money into the economy with no limits. People acted like everyone would, when things are cheap or almost free. They indulged. They bought and spent with no limits. As von Mises said, "People Act." Act they did, thanks to seeming limitless dollars being thrown around. The entire crash happened because of the housing glut, which had to crash. The economic collapse around the world, was caused by the Congress, two Presidents, and the Federal Reserve. It was not GM's fault. It was not Citi's fault. It was not AIG's fault. It was the fault of the D.C. Gang, and now they are taking over the economy to run it correctly? They are hiring like there's no tomorrow, and private employers are firing. Every week, another 600,000 apply for unemployment benefits. 608,000 this past week. I wonder how many go to D.C. for a job? Plenty are being offered.


It doesn't require even a kindergarten education to realize that governments, at any level don't do things well or economically. The larger the government, the worse it will perform. Now, the US government is the largest employer in the United States, and is hiring every hour and day. Obama, as I am writing this, will probably appoint a new 'czar' of something or other, or take control of another industry. What can be the outcome of this? We have been bankrupt for decades, and now it is coming home to roost. A $2 trillion budget with half of that in receipts? Nationalizing the health industry? Controlling everything by edict and 'executive order?' As the dollars fly off the presses, endless checks are written, and hoards hired, what can be the outcome?


The entire welfare system is being reorganized, so that practically everyone will get a check, it seems. There are no limits on handouts and subsidies for the unworthy, crooked, or stupid. Taxes will go heavenward as well, but the increases will never pay for the spending and re-distributing. As Voltaire said, "As for government, does not its art lie in taking as much money as possible from one group of citizens to give it to another?"


I'm just finishing a good new book by Joe Scarborough, host of MSNBC's morning show. It's titled, "The Last Great Hope," and you might enjoy it. His history is a bit off, but he's a good writer, and has super suggestions for getting Republicans back in control. Not that Republicans are a gift from God either, but they, if they reformed, might offer some hope. The only hope I can offer is to protect yourself and get out of the big cities. Sorry, I think the process of self-immolation has gone so far, that it is probably unstoppable. When things are going well, few think it will ever stop. Fortunately, a few such as us, realize the inevitable, and are protecting ourselves...I hope.

http://www.coloradogold.com/archive/Americas_Biggest-869.html

[Rick Ronsavelle]

"This government shouldn't be running shit. State health care in an all-White government ran by White men might not be a bad idea."

That's true- it would be worse than bad. That Whites could make an irrational system work involves imputing magical powers to Whites. Socialism, like Keynesian economics (spending our way to prosperity), is based on magical thought.

You like being forced into a bureaucratic monopoly? Maybe all needs should satisfied by state monopolies. Let's start with food- all private restaurants closed.

[Alex Linder]

How to solve America's obesity problem in one fell swoop: create a Federal Department of Food.

[Rick Ronsavelle]

With ration coupons. That will prove that the system is ration-al.

[Alex Linder]

Faith in government is even more dangerous and destructive than faith in Christianity, and that's not easy to achieve.

[Myles]

How to solve America's obesity problem in one fell swoop: create a Federal Department of Food.Sure, why not? Gluttony can be handled the same way smoking was handled under National Socialist Germany:
After German doctors became the first to identify the link between smoking and lung cancer Nazi Germany initiated a strong anti-tobacco movement and led the first public anti-smoking campaign in modern history. Anti-tobacco movements grew in many nations from the beginning of the 20th century, but these had little success, except in Germany, where the campaign was supported by the government after the Nazis came to power. It was the most powerful anti-smoking movement in the world during the 1930s and early 1940s. The National Socialist leadership condemned smoking and several of them openly criticized tobacco consumption. Research on smoking and its effects on health thrived under Nazi rule and was the most important of its type at that time.
http://en.wikipedia.org/wiki/Anti-tobacco_movement_in_Nazi_Germany

[Steve B]

How to solve America's obesity problem in one fell swoop: create a Federal Department of Food.

The feds are going to fix "global warming" too. Within 20 years I fully expect the earths atmosphere to mirror that of the planet Venus in carbon dioxide content.

[Proud White Guy]

Can anyone name one thing the bloodsuckers in Washington have done right in the last 50 years?

I for one, can't think of anything.

[Myles]

Can anyone name one thing the bloodsuckers in Washington have done right in the last 50 years?

I for one, can't think of anything.Most post offices function quite efficiently, especially when they're staffed primarily by Whites. I can place an order for a router in California and receive it in two days for under ten bucks.

And on a local level, I'll probably sound a tad cliché when I describe our hometown firefighters as nothing less than heroes.

[Axel Faaborg]

How to solve America's obesity problem in one fell swoop: create a Federal Department of Food.

Toss drugs in with that, and you'd have quite an administration.