US Budget deficit projected to be $492 billion...

[fskimospy]

This is not because our Gov't is getting responsible or cutting spending in any significant way.

It's because they've increased taxes and corporate earnings have recovered, revenue is higher.

If the Fed Gov't spent the same amount today as it did in 2007, we would have a $275 Billion surplus, not a $450 Billion deficit.

Tax Revenue by Year (in Billions)

2006 2,409
2007 2,568 <-- previous high
2008 2,524
2009 2,105
2010 2,162
2011 2,303
2012 2,450
2013 2,775
2014 3,001 (est)

Spending by Year (in Billions)

2006 2,655
2007 2,728
2008 2,982
2009 3,517
2010 3,457
2011 3,603
2012 3,537
2013 3,454
2014 3,650 (est)

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200

It's important to realize how bad that comparison is.

To begin with, the US population is 5% larger now than it was.

Secondly, you didn't adjust for inflation. That's about a 15% increase right there.

Third, the unemployment rate in 2007 was between 4.4% and 4.7%. It is several points higher now, and none of that even bothers to look at the different labor participation rates, etc.

If we were spending the same amount now that we did in 2007 we would be inflicting mass suffering on large portions of the US and would likely be mired in a catastrophic recession. While Obama's response to the recession hasn't been perfect as he hasn't spent enough, we should all be thanking our lucky stars that no one in government was foolish enough to think we should be spending now what we spent in 2007.

Hell, I don't even think conservatives really believe it. I doubt they would have been so irresponsible had they been running the government.

 

[shady28]

It's important to realize how bad that comparison is.

To begin with, the US population is 5% larger now than it was.

Secondly, you didn't adjust for inflation. That's about a 15% increase right there.

Third, the unemployment rate in 2007 was between 4.4% and 4.7%. It is several points higher now, and none of that even bothers to look at the different labor participation rates, etc.

If we were spending the same amount now that we did in 2007 we would be inflicting mass suffering on large portions of the US and would likely be mired in a catastrophic recession. While Obama's response to the recession hasn't been perfect as he hasn't spent enough, we should all be thanking our lucky stars that no one in government was foolish enough to think we should be spending now what we spent in 2007.

Hell, I don't even think conservatives really believe it. I doubt they would have been so irresponsible had they been running the government.

You're a real piece of work.

First of all, it's not 15% since 2007, it's 14.3%.

That would mean we should, all else being the same, have spending of 2007 spending + (2007 spending * 14.3%) = 3118 in 2014. Or about $530 billion less than we are spending. Oh and the 5% increase in population, that's worth about $150B more. So now we're "only" spending an extra $380 Billion above inflation and population growth.

Meanwhile, the median household income has declined about 4%. So while the civilian population has had to tighten its belt, our gov't continues to expand, and its employees continue to get better benefits and bigger raises.

You can sit there and ignore common sense and play with the numbers if you like. The simple fact of the matter is that the situation above is completely unsustainable in a democracy, it always has been. What's different now is the rate at which things are moving.

It doesn't have anything to do with Obama, he's just another political shill with nothing of substance behind him, just like the ten before him. They will all print money and deficit spend until the whole house of cards falls down. The more they spend, the sooner that will happen.

 

[mrjminer]

Pretty dismal.

Probably already at the point of no return, or getting pretty fucking close. I would guess the only thing that could stop it now would be dramatic spending reduction coupled with immediate pension / benefit cuts, possibly retroactive.

Or ratchet the defense fund up so we have a chance when other countries try to collect the trillions we owe them.

 

[fskimospy]

You're a real piece of work.

First of all, it's not 15% since 2007, it's 14.3%.

That would mean we should, all else being the same, have spending of 2007 spending + (2007 spending * 14.3%) = 3118 in 2014. Or about $530 billion less than we are spending. Oh and the 5% increase in population, that's worth about $150B more. So now we're "only" spending an extra $380 Billion above inflation and population growth.

Meanwhile, the median household income has declined about 4%. So while the civilian population has had to tighten its belt, our gov't continues to expand, and its employees continue to get better benefits and bigger raises.

You can sit there and ignore common sense and play with the numbers if you like. The simple fact of the matter is that the situation above is completely unsustainable in a democracy, it always has been. What's different now is the rate at which things are moving.

It doesn't have anything to do with Obama, he's just another political shill with nothing of substance behind him, just like the ten before him. They will all print money and deficit spend until the whole house of cards falls down. The more they spend, the sooner that will happen.

So in other words, after adjusting for inflation and growth the government is spending a little more than 10% more during a time of serious economic weakness than what it was during a period of full employment.

Sounds too low to me.

You can talk about 'common sense', but all that means is economic ideas you can't provide evidence for. If you really want to talk about the effects of various economic ideas tell me what you think the US should do, what effects you think it will have, and the basis for this thought. You don't have to be super specific, just a general outline will do.

 

[Genx87]

Hey this is great news. Now lets hold here for a couple more years while we erode that debt to gdp ratio.

 

[Bowfinger]

So in other words, after adjusting for inflation and growth the government is spending a little more than 10% more during a time of serious economic weakness than what it was during a period of full employment.

Sounds too low to me.

You can talk about 'common sense', but all that means is economic ideas you can't provide evidence for. If you really want to talk about the effects of various economic ideas tell me what you think the US should do, what effects you think it will have, and the basis for this thought. You don't have to be super specific, just a general outline will do.

It's not even that high. His Tax Policy Center link chart uses outdated 2014 estimates. Based on the new estimates from the OP, we need to reduce the increase by about another $150B.

 

[fskimospy]

It's not even that high. His Tax Policy Center link chart uses outdated 2014 estimates. Based on the new estimates from the OP, we need to reduce the increase by about another $150B.

It also doesn't take into account things like increased social security and Medicare spending due to demographic shifts, etc.

All that considered it sounds like the argument we should be having is why government spending is so low.

 

[First]

Bump.

 

[Jaskalas]

All that considered it sounds like the argument we should be having is why government spending is so low.

Are we having withdrawals from $1 trillion+ deficit spending?

 

[Newell Steamer]

I'd like to think this is a good thing - given that we all almost died as a result of the deficit,.. but, as we all know; Thanks Obama.

 

[werepossum]

Are we having withdrawals from $1 trillion+ deficit spending?

lol Apparently.

 

[fskimospy]

Are we having withdrawals from $1 trillion+ deficit spending?

No, we're just damaging our economy. I want our country to be as economically healthy as possible. Basic economics means more deficit spending.

 

[marincounty]

But Buuuuuuuuuussssssh.

Yeah, we need to bring back Bush. "surpluses as far as the eye can see..."
Obviously, we need more tax cuts for the rich to stimulate the economy.

 

[MongGrel]

It's starting to look like the recovery after Reagan screwed things up, still don't see why some still revere him.

 

[werepossum]

It's starting to look like the recovery after Reagan screwed things up, still don't see why some still revere him.

After Reagan screwed things up? lol

I did not realize that there were still Americans pining for the Carter economy. Well, unless it's only a choice between the Obama economy and the Carter economy.

 

[MongGrel]

After Reagan screwed things up?

Yes.

 

[Matt1970]

After Reagan screwed things up? lol

I did not realize that there were still Americans pining for the Carter economy. Well, unless it's only a choice between the Obama economy and the Carter economy.

I guess if they say it enough it becomes true.

 

[werepossum]

Yes.

Okay, now I understand why you love Obama. He has saved us from too many people working, too much money being made, too many people not on the dole. The Messiah, Carter 2.0.

 

[Attic]

If you give credit to the 2013 deficit widely touted as 680 billion then it puts end of fiscal year 2013 Public Debt at 16.7T. End of 2012 Public debt was 16.02T

Seen here:
http://www.treasurydirect.gov/govt/reports/pd/mspd/2013/opds092013.pdf

I don't know where the OP's article is getting 492B dollar deficit. Our current total public debt is 17.462T:
http://www.treasurydirect.gov/govt/reports/pd/mspd/2013/opds092013.pdf

Note that this 17.462T was 100 billion less than end of March due to tax receipts in April.

17.462T-16.7T=762B for the first 7 months of fiscal year 2014. 492B what?

Watch out for the accounting gimmicks to begin in earnest in the following months. This is how the 680B deficit was manufactured. There was 300billion of debt accumulated in fiscal year 2013 that was kept off the official books until Octoboer 2013 (fiscal year 2014). This is part of the reason that we have amassed so much debt going by Treasury numbers for 2014 thus far.

The 300billion accounting gimmick of 2013 will have to grow and get reshuffled into 2015 for any bureaucrat to be claiming 2014 deficits of under 500b. It is either this trick or they will put the 300billion back into 2013 and after having claimed the deficit for that year at 680billion, make it officially ~1trillion while then claiming 2014 without that messy 300billion addition that is currently ballooning it's total.

Either way, just keep in mind that at end of 2012 fiscal year we were at 16Trillion of public debt, now we are at ~17.5T. This average yearly deficit of 940billion ( (1.5T/19months)x12months ) is going to only be taken care of through sleight of hand, not through real budget solutions.

This is taking place during relatively very low interest payments (roughly half courtesy of QE) of previous years to boot.

 

[fskimospy]

If you give credit to the 2013 deficit widely touted as 680 billion then it puts end of fiscal year 2013 Public Debt at 16.7T. End of 2012 Public debt was 16.02T

Seen here:
http://www.treasurydirect.gov/govt/reports/pd/mspd/2013/opds092013.pdf

I don't know where the OP's article is getting 492B dollar deficit. Our current total public debt is 17.462T:
http://www.treasurydirect.gov/govt/reports/pd/mspd/2013/opds092013.pdf

Note that this 17.462T was 100 billion less than end of March due to tax receipts in April.

17.462T-16.7T=762B for the first 7 months of fiscal year 2014. 492B what?

Watch out for the accounting gimmicks to begin in earnest in the following months. This is how the 680B deficit was manufactured. There was 300billion of debt accumulated in fiscal year 2013 that was kept off the official books until Octoboer 2013 (fiscal year 2014). This is part of the reason that we have amassed so much debt going by Treasury numbers for 2014 thus far.

The 300billion accounting gimmick of 2013 will have to grow and get reshuffled into 2015 for any bureaucrat to be claiming 2014 deficits of under 500b.

The CBO is counting debt held by the public, the debt you guys are counting includes intragovernmental debt. Ie: debt one part of the government owes another part. If your left pocket owes your right pocket $100, are you any poorer?

Maybe before alleging yet another government conspiracy we should make sure we understand the terms under discussion.

 

[zinfamous]

Cool! So what should we spend the extra money on? :biggrin:

diapers

 

[shady28]

The CBO is counting debt held by the public, the debt you guys are counting includes intragovernmental debt. Ie: debt one part of the government owes another part. If your left pocket owes your right pocket $100, are you any poorer?

Maybe before alleging yet another government conspiracy we should make sure we understand the terms under discussion.

If you left pocket borrowed 300 Billion $ to loan to your right pocket, yes you're poorer.

But whatever. You clowns want more Gov't debt, we're going to get it. Frankly I'm ok with that.

It has two effects :
The rich get even richer, even faster, because your Uncle Sam owes them big.

The end result of excess spending comes even faster.

My guess is that the end result happens shortly after SS stops having excess funds to buy treasuries with. That's all they have in their trust fund - US Gov't debt.

That's the double whammy. Not only does a major "buyer" of US debt (social security) stop buying, but that buyer also starts redeeming tens, then hundreds of billions in treasuries each year. The US Treasury must then either take the funds from general revenue, or borrow even more ( from a reduced pool of lenders, since SS won't be there lending to them ).

The little bump we got in taxes last year for SS just pushed this scenario off for a few years, since SS was already starting to take interest on its outstanding bonds as cash rather than buy new bonds (in 2012). Now they're back to buying treasuries - for a little while.

You know you can only kick that can down the road for so long.

Keep on thinking this chart and the sluggishness of economic "recovery" are unrelated.

 

[Engineer]

Keep on thinking this chart and the sluggishness of economic "recovery" are unrelated.

The 'sluggishness' is because we gave our good paying middle class jobs away and both the sluggishness and deficits are a result of government trying to keep the middle class and lower classes, both sinking, above water. Until we fix the structual problem of lower wage jobs replacing better paying, middle class jobs...we will always be going downhill.

 

[Attic]

The CBO is counting debt held by the public, the debt you guys are counting includes intragovernmental debt. Ie: debt one part of the government owes another part. If your left pocket owes your right pocket $100, are you any poorer?

Maybe before alleging yet another government conspiracy we should make sure we understand the terms under discussion.

I get that, though it's gimmicks. I'm counting the widely used and understood public national debt, the one that got used for the 680billion quote from the article.

 

[shady28]

The 'sluggishness' is because we gave our good paying middle class jobs away and both the sluggishness and deficits are a result of government trying to keep the middle class and lower classes, both sinking, above water. Until we fix the structual problem of lower wage jobs replacing better paying, middle class jobs...we will always be going downhill.

It's a ton of different things that all happen slowly over a long period of time.

What you're describing has its roots in globalization of world financial markets, the petrodollar, etc.

I like to keep it simple though, I just call it social entropy.