Monday, July 13, 2009

Deficit to Near $2 Trillion for One Year

Remember when the Democrats were apoplectic about a deficit in the hundreds of billions?

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.

(8) Comments
Posted by Owen at 2011 hrs
Politics + Politics - General

  1. But but but but… things were so much worse than we thought and this is all Bush’s fault anyway.

    There, I just saved all the lefties a little time.

    Posted by Recess Supervisor on July 13, 2009 at 2017 hrs


  2. Well, the deficit is one of the last things you should worry about in a major recession. Tax revenues have dropped dramatically, and if the government cuts back in expenditures, the economy will suffer further.

    Posted by .(JavaScript must be enabled to view this email address) on July 14, 2009 at 0403 hrs


  3. You beat me to it, Recess - ditto

    Posted by .(JavaScript must be enabled to view this email address) on July 14, 2009 at 0758 hrs


  4. Wonderful what all that hope and change can do for you.  I don’t have much hope and what little “CHANGE” I have I throw in a dish for my laundry.  Stupid ass koolaid drinkers!!!!!!!

    Posted by .(JavaScript must be enabled to view this email address) on July 14, 2009 at 0812 hrs


  5. Steve-O

    Government spending doesn’t solve anything in a recession.  The stimulus isn’t creating private sector jobs that drive the economy.  It is creating more public sector jobs and higher debt, both of which are big drags on the economy.  Running a deficit in a recession can stimulate the economy if you are running the debt by reducing taxes.  But just randomly spending vast sums of money only magnifies the problem.

    Posted by .(JavaScript must be enabled to view this email address) on July 14, 2009 at 0907 hrs


  6. and if the government cuts back in expenditures, the economy will suffer further.

    ?????????????????????????????????????????????????????

    Posted by Smeety on July 14, 2009 at 1013 hrs


  7. Govt spending does not and govt jobs are not what makes the economy grow. It’s businesses who are expanding that create wealth.

    Posted by .(JavaScript must be enabled to view this email address) on July 14, 2009 at 2322 hrs


  8. No one in their biggest nightmare ever thought that this gang would do what they have done.  They make Carter look like a piker. 
      They have little interest in the short term problems of the people, only the long term turn to socialism.
      “From those who have to those who want”.

    Posted by .(JavaScript must be enabled to view this email address) on July 15, 2009 at 1201 hrs


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