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Thread: Budget deficit tops $1 trillion for first time

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    Budget deficit tops $1 trillion for first time

    WASHINGTON - The federal deficit has topped $1 trillion for the first time ever and could grow to nearly $2 trillion by this fall, intensifying fears about higher interest rates, inflation and the strength of the dollar.

    The deficit has been widened by the huge sum the government has spent to ease the recession, combined with a sharp decline in tax revenues. The cost of wars in Iraq and Afghanistan also is a major factor.

    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. "Our foreign investors from China and elsewhere are starting to have concerns about not only the value of the dollar but how safe their investments will be in the long run."

    The Treasury Department said Monday that the deficit in June totaled $94.3 billion, pushing the total since the budget year started in October to $1.09 trillion. The administration forecasts that the deficit for the entire year will hit $1.84 trillion in October.

    Government spending is on the rise to address the worst financial crisis since the Great Depression and an unemployment rate that has climbed to 9.5 percent.

    Congress already approved a $700 billion financial bailout for banks, automakers and other sectors, and a $787 billion economic stimulus package to try to jump-start a recovery. Outlays through the first nine months of this budget year total $2.67 trillion, up 20.5 percent from the same period a year ago.

    There is growing talk among some Obama administration officials that a second round of stimulus may eventually be necessary.

    That has many Republicans and deficit hawks worried that the U.S. could be setting itself up for more financial pain down the road if interest rates and inflation surge. They also are raising alarms about additional spending the administration is proposing, including its plan to reform health care.
    ....

    Under the administration's budget estimates, the $1.84 trillion deficit for this year will be followed by a $1.26 trillion deficit in 2010, and will never dip below $500 billion over the next decade. The administration estimates the deficits will total $7.1 trillion from 2010 to 2019.
    My Way News - Budget deficit tops $1 trillion for first time

    (Bold=== IOW the Best spin they can think of without being caught outright lying.)



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    Re: Budget deficit tops $1 trillion for first time


    *Note the Bush years on the leftmost graph in comparison to one year of Obama.

    The U.S. Treasury Department on Monday said the government's annual deficit reached almost $1.1 trillion by the end of June, a once-unthinkable level that could threaten any nascent economic recovery by undermining the dollar and driving up interest rates.
    $1 Trillion Deficit Complicates Obama's Agenda - WSJ.com

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    Re: Budget deficit tops $1 trillion for first time

    "Fiscally Responsible"..remember that?
    "We can't keep spending like this"..remember that?
    "Bush is producing a gigantic debt!"..remember that?




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    Re: Budget deficit tops $1 trillion for first time

    Now the WH is admitting the numbers above are too optimistic and they will be redoing them.....

    Maybe he'll hit $2 Trillion for one year (2009).....
    Even if the economy somewhat stabalizes his spending will cause inflation....
    Carter..

    President Barack Obama’s economic forecasts for long-term growth are too optimistic, many economists warn, a miscalculation that would mean budget deficits will be much higher than the administration is now acknowledging.

    The White House will be forced to confront the disconnect between its original, upbeat predictions and the mainstream consensus about how the economy is likely to perform in a new budget forecast to be unveiled next month.

    Christina Romer, chairwoman of the White House’s Council of Economic Advisers, said in a POLITICO interview that the administration — like many independent economists — did not fully anticipate the severity and pace of this recession. She said the White House will be updating its official forecasts.

    The new numbers will come as part of a semiannual review that, under ordinary circumstances, is the kind of earnest-but-dull document that causes many Washington eyes to glaze over.


    This time, however, the new forecasts — if they are anything like what many outside economists expect — could send a jolt through Capitol Hill, where even the administration’s current debt projections already are prompting deep concerns on political and substantive grounds.
    Some economists warn Barack Obama's economic predictions too optimistic - Jeanne Cummings - POLITICO.com


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    Re: Budget deficit tops $1 trillion for first time

    This is only the beginning and it will only get worse as Obama's plans continue to be past by his disciples who continue to defend his plans to dismantle America as he promised before the election,: Nov 2, 2008 ... San Francisco Chronicle interview: Obama said: "Under My Plan...Electricity Rates Would Necessarily Skyrocket" people will lose jobs, spend less, tax rolls will decrease, prices will rise all spending will come down idiots will say we need to tax more and round and round it goes because they want to tax hell put of the vary people who would other wise create jobs. Hussein Obama will fulfill his other goal which he also stated before his deciples elected their Savior in Chief. "March 15, 2008 ... "My friends, we live in the greatest nation in the history of the world. I hope you'll join with me as we try to change it". And now he's well on his way there. Can't wait to hear the next promise he'll break and the Liberals and media will find a way to ignore or excuse it with vigor no less. So far his dictatorial actions on the economy make Bush spending look trivial in comparison. I was no fan of Bush either.

    Recession is when your neighbor loses their job.
    Depression is when you lose your Job.
    Recovery is when Obama loses his job.

    "All that is required for evil to prevail is for good men to do nothing." Edmund Burke
    Last edited by Councilman; 07-15-09 at 07:50 AM.

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    Re: Budget deficit tops $1 trillion for first time

    so 24 hours passed and posters who think Obama has been perfect thus far are strangly absent....
    Let evil swiftly befall those who have wrongly condemned us

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    Re: Budget deficit tops $1 trillion for first time

    Quote Originally Posted by Reverend_Hellh0und View Post
    so 24 hours passed and posters who think Obama has been perfect thus far are strangly absent....
    Ok I'll shoot

    Whatever one thinks in terms of the political aisle we sit on, let's acknowledge a few points of interest in regards to the chart.

    1.) With the Iraq withdrawl, this should in theory and practice lower DOD costs. I believe we have around $140b for both wars for this year, with a total DOD expense of $600b. Questions should be asked as to why we spend so much for defense. It is no longer a question of simply our own defense when we spend 48% of the world's total in comparison.Obviously something needs to change in the future.

    2.) TARP payout should be ending. In fact we are now receiving funds originally paid out. By June $68b has been repaid - CNN

    3.) Unemployment benefits paid out. Since unemployment itself is a fraction of one's previous income, and is limited in length, job recovery should both decrease pay outs as well as increase tax revenue...obviously. The key to after September will be when more of the stimulus is paid out to more and more of the shovel ready jobs. Ideally this would hopefully hold off an increasing unemployment rate, or best case begin to reverse the trend.

    4.) All indications both economically and politically are that there will be no more stimulus. Thus the $787b Recovery Act is limited to this fiscal year.

    5.) Health care reform- If Congress can create the right health care reform bill that reduces costs, then one of the largest chunks of the budget (Medicare and Medicaid) should decrease.

    6.) 2011 the Bush tax cuts will expire, which while I am sure everyone focuses solely on the spending, let us not ignore the equation of revenue.

    7.) GM bailout greatly affected FY09...but will not in 2010. Question is, should this have been in FY08?

    My point here is it is impossible to draw comparisons because the circumstances have changed greatly. I know the budget for this year is cannon fodder for many, but it is asinine to think that we would necessarily have seen a difference. It was near unanimous that we needed a stimulus package of significance in order to confront an economic crisis this deep, not seen since the Great Depression.

    Enjoy, and bash away.
    Last edited by sam_w; 07-15-09 at 08:36 AM.

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    Re: Budget deficit tops $1 trillion for first time

    They haven't of any smack that can answer the charge.
    "He who does not think himself worth saving from poverty and ignorance by his own efforts, will hardly be thought worth the efforts of anybody else." -- Frederick Douglass, Self-Made Men (1872)
    "Fly-over" country voted, and The Donald is now POTUS.

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    Re: Budget deficit tops $1 trillion for first time

    Quote Originally Posted by sam_w View Post
    Ok I'll shoot

    Whatever one thinks in terms of the political aisle we sit on, let's acknowledge a few points of interest in regards to the chart.

    1.) With the Iraq withdrawl, this should in theory and practice lower DOD costs. I believe we have around $140b for both wars for this year, with a total DOD expense of $600b. Questions should be asked as to why we spend so much for defense. It is no longer a question of simply our own defense when we spend 48% of the world's total in comparison.Obviously something needs to change in the future.
    Not by $1Trillion

    2.) TARP payout should be ending. In fact we are now receiving funds originally paid out. By June $68b has been repaid - CNN

    3.) Unemployment benefits paid out. Since unemployment itself is a fraction of one's previous income, and is limited in length, job recovery should both decrease pay outs as well as increase tax revenue...obviously. The key to after September will be when more of the stimulus is paid out to more and more of the shovel ready jobs. Ideally this would hopefully hold off an increasing unemployment rate, or best case begin to reverse the trend.
    Not by $1Trillion

    4.) All indications both economically and politically are that there will be no more stimulus. Thus the $787b Recovery Act is limited to this fiscal year.
    Yeah, that's $1Trillion

    5.) Health care reform- If Congress can create the right health care reform bill that reduces costs, then one of the largest chunks of the budget (Medicare and Medicaid) should decrease.
    Not by $1Trillion

    6.) 2011 the Bush tax cuts will expire, which while I am sure everyone focuses solely on the spending, let us not ignore the equation of revenue.

    Enjoy, and bash away.
    Not $1Trillion
    "He who does not think himself worth saving from poverty and ignorance by his own efforts, will hardly be thought worth the efforts of anybody else." -- Frederick Douglass, Self-Made Men (1872)
    "Fly-over" country voted, and The Donald is now POTUS.

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    Re: Budget deficit tops $1 trillion for first time

    www.thecaffeinemachine.com - looking for main-page political writers, so if anyone is interested send a PM (apologies if that violates any rules)

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