The federal government ran a $777 billion deficit for the first six months of fiscal year 2012, the Congressional Budget Office estimated on Friday, including a $196 billion hole in March, marking the 40th straight month of deficits.
That streak goes back to the financial collapse under President George W. Bush, and means the government has never run a surplus in any month during President Obama’s tenure. The longest previous deficit streak on record was 11 months.
At $777 billion, this year’s deficit is an improvement compared to 2011 at this point, with tax revenues rising $46 billion and spending falling by $7 billion — due in part to the expiration of some stimulus programs in education and Medicaid.
But we need to keep spending to ward of unemployment guys. There’s no such thing as the crowing out effect or the broken window fallacy. Nothing to see here folks, move along.
Time to end the government monopoly on first class mail.
The U.S. Postal Service said Tuesday it lost $5.1 billion last year as a weak economy and increased Internet use drove down mail volume.
The bleak financial report for the fiscal year ending Sept. 30 was not as high as the $10 billion in losses previously estimated. But that’s because an annual payment of $5.5 billion the post office owed the federal government has been deferred to a later date.
Postal officials called the financial situation “dire.” They say the Postal Service will not be able to make the $5.5 billion payment due this Friday due to low cash flow.
Postmaster General Patrick Donahoe has warned of a postal shutdown next year unless there is congressional action to address the agency’s long-term money problems.
Last week Virginia Gov. Bob McDonnell handed down a tough directive to state agency heads: As you start putting together your budgets for the next biennium, look hard for places to cut—and don’t spare anything. Programs that bring matching federal funds? On the table. Programs required by current state law? On the table. We can always change the law.
Given these stark realities, perhaps now is the point at which Virginia leaders should give college athletics a long, hard look. Why? Two reasons: (1) They cost a gawdawful lot of money, and (2) they have nothing to do with the purpose of a university.
Most college athletic departments are a net drain on the budget. Three years ago, the NCAA issued a report that found most athletic departments operate in the red. A more recent analysis by Bloomberg found the same thing: 46 of the 53 schools it looked at subsidized their sports programs. The money usually comes from sources such as student activity fees, such as that charged at Virginia Commonwealth University. Earlier this year VCU jacked up its fee by $50 to help fund the Rams basketball program.
My ladyfriend flew in from Florida on Wednesday so I’ve been spending as much time with her as possible.
Observations: It seems that when I take brief hiatuses from tumbling, the economic and politically illiterate come out in full force. It would appear some have even been elevated to #politics editors as to give these radically misinformed individuals their very own soapbox.
Now, you can disagree with a political ideology. I sure as hell disagree with my fair share. But please, try to refrain from incendiary, hyperbolic speech as to relate your political opponents to terrorists. The Tea Party can be whittled down to about 2 main concepts: Less taxes, less spending. They are in no way a terrorist organization. You may think your side got jipped in the recent debt ceiling compromise, but let me tell you that the only people who “lost” in this deal were the American people and its economy.
It takes a pretty deluded person to look at these graphs and determine that the real source of our ills is that the government isn’t taking enough of other people’s money. Government spending has rocketed upward in the last decade with neither administration trying to pay for anything.
Federal spending is up near 25% of GDP. The government is paying an amount equal to a quarter of the value of all that is produced in this country in a year. It’s on track to be 30% of GDP by 2020. We have gone from Bush’s record breaking 500 billion dollar budget deficits to Obama record obliterating 1.6 trillion dollar budget deficits. Obama’s budget he produced earlier this year was so absurd not a single Senator voted for it.
The Obama Administration has done nothing to slow the growth of spending or government. His administration has increase military activity in the Afghanistan and Iraq. He has tripled drone strikes in Pakistan and Yemen (and now Somalia). He has started an unconstitutional war with Libya. But that’s Bush’s fault right? His administration is ignoring state’s rights by shutting down medical marijuana dispensaries, they’ve exacerbated the police state powers granted to the federal government by the Patriot Act (which he campaigned against), federal wiretap usage increased 34% in 2010. His Healthcare Reform is going to add trillions to the national debt and make healthcare more expensive for seniors and families. In 2014, when more portions of the law go into effect, the Department of Health and Human Services will be the country’s first trillion dollar a year agency. The total amount of our unfunded liabilities (Medicare, Medicaid, Social Security) is in the 60+ trillions of dollars. That’s more than the entire world’s GDP.
So no, we do not have a revenue problem. We have a spending problem. You cannot tax your way out of big government or big spending, especially spending that’s larger than the entire world economy. The rapid increase in spending began shortly after the 2006 midterm elections. This was around the time new House Speaker Nancy Pelosi promised no new deficit spending.
The shortfall in May a year ago was $135.9 billion with most of the outlays improvement driven by a downward estimate in the cost of the Troubled Asset Relief Program (TARP) by about $45 billion.
Still, through eight months of the 2011 fiscal year the nation is facing its third straight $1 trillion-plus deficit — totaling $927.4 billion so far compared with $935.6 billion during the same period in 2010, about $8 billion less, according to the report.
Vice President Joseph Biden and congressional leaders will meet several times next week to discuss a way to tackle the burdensome debt and increase the $14.3 trillion debt limit before Aug. 2, when the Treasury says the U.S will default.
Total receipts for the fiscal year are $1.5 trillion, about 10 percent higher than last year, with outlays standing at $2.4 trillion, about 6 percent above last year’s levels.
The Honorable _________ U.S. House of Representatives Washington, DC 20515
The Honorable _________ United States Senate Washington, D.C. 20510
Dear Mr. or Ms. _______,
Thank you for your interest in the American Public Trust’s Gold Card credit program. Rest assured your application has been given thorough and careful consideration by the American people.
After reviewing the information provided in your application as well as your credit report, we regret to say that we are unable to extend you further credit at this time. The reasons for our decision are as follows:
(1) Inadequate income.Our records indicate that your annual income for the 2011 taxable year was $2,170,000,000,000. You have requested a credit limit of $17,000,000,000,000. These figures exceed the American Public’s debt-to-income guidelines for credit issuance.
(2) Excessive spending. The receipts you provided indicate your annual expenditures for the 2011 fiscal year total $3,820,000,000,000, or $1,650,000,000,000 more than your total income for the year. The American Public prefers that its members of Congress maintain a positive or neutral rather than a negative cash flow.
(3) High debt utilization. Your credit report indicates that you have a credit limit of $14,300,000,000,000, and of that amount you have utilized $14,300,000,000,000, for a debt utilization ratio of 100 percent. Consumer banking industry guidelines recommend a debt utilization ratio of no greater than 30 percent for standard creditworthiness, and 10 percent for exemplary creditworthiness. A debt utilization rate of 100 percent meets our classification of “You’re *&^%$#@! kidding, right?”
Senate Minority Whip Jon Kyl (R-Ariz.) said Monday that Republicans will likely demand cuts to the budget worth $6 trillion over the next decade in exchange for voting to raise the national debt limit.
“You’re going to have to have significant upfront cuts,” he told reporters Monday. “You’re going to have to have significant constraints on future spending. You’re going to have to have an agreement on the next several years of budget numbers so we know exactly what those are. I think there will be other constraints on spending – there is more than one way to do that, I think there are several things that might be done.”
The recession of 2007-2009 was worldwide. The timing and sequence of events across major industrialized countries correlated to an extent not seen in the postwar period. But the severity of the recession in different countries was far from uniform. These differences provide insights into what can be done to alleviate the impact of future downturns.
In comparing the experience of the United States, Canada, Japan, and the Eurozone of 16 countries, two conspicuous findings emerge. One of these, which we address on the back page, is the relationship between different regulations governing employment and the unemployment rates during both recession and recovery. The other, discussed here, is the relationship between debt financing and the decline of output during a recession.
The primary differences in the severity of this recession across nations can be explained by the levels of debt each had going into the downturn. Countries that had built up high debt loads suffered deeper and longer recessions. The immediate implication is that nations that run up high debt-to-GDP levels through deficit spending now may be compromising their ability to survive the next recession…
This is a veeerrrryyy interesting read. I highly recommend it to those that think the debt crisis and our yearly deficits aren’t that big of a deal.
As the federal government rapidly approaches the $14.3 trillion debt ceiling, 96 percent of Americans say it is important to reduce the national debt, according to a new Reason Foundation-Rupe poll. Of those surveyed, 69 percent believe reducing the national debt is “very important.”
With the debt piling up, it is also clear that taxpayers do not trust the federal government to live within its means. In fact, the Reason-Rupe survey finds 74 percent of Americans support implementing a spending cap that would prohibit the government from spending more money than it takes in during a fiscal year. Only 19 percent oppose a government spending cap.
The most popular policy prescription for reducing the national debt is spending cuts: 45 percent of people say Congress should bring down the debt by reducing spending without raising taxes. Another 16 percent favor reducing the debt primarily through spending cuts, but are open to some tax increases; 14 percent prefer an equal emphasis on spending cuts and tax increases; 8 percent want to reduce the debt primarily through higher taxes with some spending cuts; 4 percent say current spending levels should be maintained and taxes should be raised as needed; and 1 percent of Americans say we shouldn’t do anything about the debt.