Skip to comments.Federal Deficit on Pace to Reach Record $1T
Posted on 12/10/2008 6:45:34 PM PST by marshmallow
Gov't reports largest imbalance ever in Nov., annual deficit could reach record $1 trillion
WASHINGTON (AP) -- The federal government ran a record budget deficit in November, putting Uncle Sam on track to post an all-time high annual shortfall of $1 trillion or more.
In just the first two months of the budget year that started Oct. 1, the deficit totaled $401.6 billion, nearly matching the record gap of $455 billion posted for all of last year, according to Treasury Department data released Wednesday. If the deficit does top $1 trillion for the current budget year, it also would be a post-World War II high when measured as a percentage of the economy.
The increased red ink stems from both lower tax revenue and increased spending that is a result of the recessionary economy. The government is receiving less in business and personal income taxes while spending more on programs such as unemployment insurance and food stamps.
Elsewhere, emergency aid for the nation's imperiled auto industry was thrown into jeopardy Wednesday as some Republicans revolted against a hard-fought deal between Democrats and the Bush White House to speed $14 billion to the ailing carmakers.
Then there's the $700 billion bank rescue program. The Treasury report showed that the government spent $76.5 billion from the program in November and $191.5 billion over the past two months.
A congressional oversight panel on Wednesday questioned whether Treasury is following a clear strategy in its use of those funds. The panel, which includes academic and labor representatives, also asked in a report whether the rescue effort has helped any homeowners avoid foreclosure.
(Excerpt) Read more at biz.yahoo.com ...
Here’s another thread where we should ask whether the limitation of our purchases of foreign goods can help.
What if we had laws that said you had to balance the budget?
What if we had kept spending at 2000 levels and increased only at the level of inflation?
What if we had PAYGO in place when Jorge Arbusto decided he wanted to buy off seniors or go fight a war in Iraq?
What if we hadn’t gotten rid of the rules that said debt levels were limited at 12:1 ratios instead of letting the banks and financial houses keep borrowing and lending without a care?
Deficits dont matter. Its not like they add to the National Debt or anything./s
Trade wars are to no one’s benefit. However, shopping locally when and where possible is a good thing. China is going into tailspin because we are not importing like we used to.
$1 trillion in one year. I’m at a loss for words.
Obama, you want to give us real change from Bush? Balance the budget. Yes, we can balance the budget without cutting defense or raising taxes. Yes, we can!
“China is going into tailspin because we are not importing like we used to.”
yeah because our economy sux
Guess we should be grateful for giving our money away for toxic products./s
No argument there. But that has nothing to do with the fact that our government spends more money than it takes in.
It absolutely follows. Thanks for denying
Oh really? Please explain.
The libs sure LOVE their CORPORATE WELFARE all of a sudden ...don’t they?
Where do you think the federal deficit comes from? Define the federal deficit for us. You think its a simple matter of spending more than we take in, tax wise. How is it that we have a “trade deficit” with countries like China, but not Saudia Arabia?
Hey, there is a danger when the pusher gets his customer hooked on the junk. At some point the junkie gets clean or winds up dead.
You can’t be serious. You think we have a trade surplus with Saudi Arabia?
What if our government weren’t able to monetize debt, and therefore had to go asking for loans? Would anyone give them the time of day?
What if there was no national currency to mess around with?
What if gumdrops rained from the sky?
Saudi Arabia has had a slim trade surplus with the US, but nothing compared to China. Your argument is there is no correlation(nothing follows) between the trade and federal deficits. You would be mistaken.
How is it that we have a trade deficit with countries like China, but not Saudia Arabia?
You'd have to go back to 1998 for the last time we had a trade surplus with the Saudis. And before that, 1985.
They run surpluses with almost every country because oil is pretty much all they have. We get most of our oil from Canada. The point is the federal deficit is directly liked with trade and trade deficits. In a global economy they run hand in hand.
I pay cash for my oil import from Saudi Arabia. Please explain how that causes the government budget deficit to increase.
the deficit is tiny compared to China. My argument is trade and federal deficits are closely linked and 1rudeboy said my argument didnt follow
And you would have to prove it.
And this gets to the nut of your argument: if we can get the trade deficit to decrease, then the budget deficit will also?
That’s not really true necessarily. A good case in point is Japan.
Oil is bought by the government as well. Oil is a commodity. When we ship our dollars over for a product that is worth substantially less than that dollar is worth, you have both a trade and federal deficit.
we dont buy oil from japan
As trade deficits decrease we are buying more product for the same dollar. If we have more product that is worth what is being paid for, the federal budget becomes stronger with a stronger dollar, which means lower federal deficits.
“Guess we should be grateful for giving our money away for toxic products”
This whopping deficit is all about wasting money on good, old American companies.
By the way, since when is our government stockpiling childrens’ toys?
So what? You said we didn't have one.
My argument is trade and federal deficits are closely linked and
Only countries with trade deficits run government deficits? Do countries with trade surpluses have federal surpluses or at least no deficits? You have any facts to back up your "theory"?
1rudeboy said my argument didnt follow
Only because it doesn't.
I should have said we used to not have one.
According to others here, though trade and federal have nothing to do with each other. How is it we are wasting money on American companies? The US buys more than just oil, by the way
Im simply saying they are linked. They dont have to always be positive or negative in term of correlation. My response is its not a non-seq. argument
A stonger dollar leads to higher trade deficits, and has nothing to do with the federal deficit. If you’ve been paying attention for the past decade.
No, they are always linked. It may be a strong or weak correlation, but they are always linked. You said my argument didnt follow at all.
Not the point—They have huge government deficits but trade surpluses.
Uh, we have had a weaker dollar for the last decade and huge trade deficits. If fact the dollar has lost a tremendous amount over the last decade to other currencies and our “trade” deficit has exploded. Are you delusional?
Prove it. Not with your feelings, just prove it.
Japan has trade surpluses based on their currency valuation. Just like China keep the Yuan pegged to the dollar. Also Japan has been esentially in a recession almost all of the last decade
When we ship our dollars over for a product that is worth substantially less than that dollar is worth
Why would we pay $1 for something worth substantially less than $1? Did you ever take an economics class?
We should not trade with countries that enslave their citizens. That is not “Free” trade. I think you would have to call it “Slave” trade.
"It may be a strong or a week correlation" is no correlation, and certainly not a "link."
Apart from the other stuff, I’m sensing some serious confusion between “nominal” and “real.”
Why would you pay 40 dollars for a plastic toy that is esentially worth 80 cents from China? Happens every day here in America. Why does the government pay 800 dollars for a toilet seat? Check out the SPR for amounts being bought for oil
Yeah, twice in the last 23 years. LOL!