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Today's U.S. budget deficit headlines
Tuesday, January 26, 2010
It probably was not intended that these two headlines come out within hours of each other, but their doing so certainly sheds new light on the problem of the nation's growing debt.
Note that the $1.35 trillion estimate for the 2010 budget is actually an improvement over last year's deficit of $1.40 trillion, a figure that is almost half of the government's overall spending. When you think about it, that's a pretty sweet deal - spend almost double what you take in with little chance of that changing anytime soon, and people keep lending you money.
6 comments:
Actually, people are no longer lending that. The Fed is having to buy a lot of the issue and this is exactly why QE is not going to end in March. At some point it will lead to much higher rates and dollar weakness (though not necessarily against other paper currencies).
Yes, the problem is not that we're running a huge deficit, but that one day we might have to stop. . .
Too much debt. Way too much debt. Plato was right, spendthrifts tend to get elected, and wreck the place with their wanton ways.
If the proverbial "they" tanks the stock and commodity markets, there could be a "flight to safety" into treasuries and the dollar easing the need for QE.
@Dan. Yes, the knee-jerk reflex can and did happen but it does nothing to address to structural issue. The Fed would look even more ridiculous if it stopped QE one quarter to restart it the next. If we get an echo, I will fade cash for more commodities and certain equities. But, there is always a twist as it never quite goes down the same. I suspect most equities will get smacked again but not so much commodities and gold this time around.
If our deficit is so bad, why don't we stop, you know, deficit spending to fund dropping bombs on Muslims? Then we might even be able to stop paying to restore the infrastructure we destroyed!
I wonder how much of our money is spent on our multiple wars, and paying interest on the loans we took out to fight past wars. I would love for Tim to do a piece on how much of the deficit is a result of American war spending, as compared to entitlement spending.
We spend more on defense than the rest of the world...combined. Perhaps we have too many guns and not enough butter? I'm not suggesting that we eliminate the intelligence community, but we won't get control of our deficit until we stop spending many hundreds of billions of dollars a year in the pursuit of death and destruction.
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