The budget deficit for the fiscal year ending September 30th is $455 billion [Source: U.S. Department of the Treasury].
The total national debt to the penny is $10,653,271,333,099.91 [Source: U.S. Department of the Treasury, Bureau of the Public Debt].
In February, President Bush signed the “Economic Stimulus Act of 2008″ at a cost of $152 billion [Source: CNN.com, "Bush signs stimulus bill; rebate checks expected in May", February 13, 2008].
In October, Congress passed and the President signed a $700 billion package to bailout Wall Street [Source: National Public Radio, "Bush Signs $700 Billion Financial Bailout Bill", October 3, 2008].
Congress is preparing to pass a $15 billion bailout bill for the auto industry [Source: MSNBC.com, "Democrats, White House work on auto bailout", December 8, 2008].
Barack Obama is readying a $700 billion public works plan and local governments across the nation, including quite a few here in Georgia, are already showing up with their hands out for some of that cash [Sources: Chicago Tribune, "Barack Obama pledges $700B public works plan to help economy", December 7 2008; Atlanta Journal Constitution, "Georgia cities line up for Obama’s public works plan", December 9, 2008].
Now will someone please tell me where we’re getting all this money?
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It’s money from the long run, when we’ll all be dead anyway.
My GUESS is: We’re borrowing from other countries (China, etc.) and international agencies. Every time I hear the words “bailout” or “public works plan” etc I think that the US govt is solving the economic problem by borrowing its way out and hopefully we’ll make enough money off of the efforts to rise like a phoenix out of the ashes.
A bit melodramatic but…
I also wonder whether my guess even makes sense ’cause so many other countries are doing the same thing. Can everyone be borrowing? Where is the money that’s funding all these bailouts around the world? Is it just more leveraging under a new name with public approval ’cause of the job losses? I’m confused….
Or, ya know, we could just sit here with our thumbs up our asses like Hoover.
Also, any fool can run a deficit when times are bad. It takes a special brand of idiots to throw away our reserves when times are good. Back home, we tend to call those Republicans.
Also keep in mind that we are living off of infrastructure that is decades old. So, if we make this big investment in ourselves (rather than churning out and buying up plastic consumer goods), it is going to be ours to use for a very long time. I’m thinking of lots of new bridges, a new power grid for long distance distribution of renewable power sources, and a lot of renewable generation itself.
We’ll also benefit from breaking the back of the oil cartels via the energy switch. These were always good things to invest in. Now that we are hunting around for something to keep ourselves busy, they seem to be a no-brainer.
Fred’s comments on the subject:
http://blip.tv/file/1528079
Had Hoover sat there with his thumb up his ass, the Great Depression would have been called the 1929 recession. In stead, like the current moron in the White House, he felt compelled to stick his ignorant hands into things and turned a problem into a total disaster.
Obviously Andre has never heard of financing.
No wonder he got canned from the DPG.
Obviously, Goldwater Conservative, you failed to see the implied point in what I’ve written.
The point is to highlight the lack of fiscal responsibility and fiscal conservatism at the federal level these days.
Former President Clinton proved, during his eight years in office, that you can grow the economy while balancing the budget.
Right now, there isn’t a whole lot of difference between the Democrats and the GOP when it comes to managing the budget. The Democrats tax and spend while the Republicans borrow and spend.
Andre,
The thing with Clinton’s budget balancing is that it reduced the phenomenon of crowding out, which is where government debt increases its interest rate to allow for more borrowing. Since gov’t debt is seen to be the safest, its increase tends to put upward pressure on all other debt. Such is the theory that was used to justify tax increases to reduce the deficit. The argument was that the crowding out effect was stronger than the effect of increasing taxes on reducing investment.
The problem in a recession is more psychological than technical. People don’t invest because they fear that promised returns won’t materialize. At this point, deficit spending serves to keep the economy on life support long enough to prove the sky isn’t falling. Eventually, fear gives way to greed, and investment returns.
So, there’s my causal chain. What’s yours?
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