U.S. 2009 Deficit: $1.2 Trillion and DOES NOT INCLUDE Bailouts or Obama’s Stimulus Plan
January 7th, 2009Via: AP:
The federal budget deficit will hit an unparalleled $1.2 trillion for the 2009 budget year, according to a Capitol Hill aide briefed on new Congressional Budget office figures.
The aide says the CBO also sees a $703 billion deficit for 2010.
The dismal figures come a day after President-elect Barack Obama warned of “trillion-dollar deficits for years to come.”
CBO’s figures don’t account for the huge economic stimulus bill that Obama is expected to propose soon to try to jolt the economy. At the same time, they do not reflect the immediate cost of the Wall St. bailout.
The shrinking economy has led to a sharp drop in tax revenues, which is largely responsible for the deficit, along with about $350 billion in spending so far for the Wall St. bailout.
Obama and Congress are promising quick enactment of the economic recovery plan, which will blend up to $300 billion in tax cuts with big new spending programs and could cost up to $775 billion over the next few years.
The flood of red ink probably won’t affect that measure but could crimp other items on Obama’s agenda.
The $1.19 trillion 2009 figure shatters the previous record of $455 billion, set only last year. It also represents about 8 percent of the size of the economy, which is higher than the deficits of the 1980s. The 2009 budget year began last Oct. 1.
And this is exactly the sort of thing that continues to propel the US economy towards dollar-devaluation and -collapse. The only reason that this hasn’t happened already is that the US currency has become the financial lifeblood of the world industrial economy. Which means that when the dollar finally does falter incurably, it won’t be just people in the USA who will be “hurtin’ units” as a result.
There are a lot of factors being stacked against the dollar, like China making the yuan an international currency and many governments running deficits for the first time in a while (so they become a net-seller of treasuries rather than buyer):
http://www.marketskeptics.com/2009/01/ten-major-threats-facing-dollar.html
Loveandlight said:
“the US currency has become the financial lifeblood of the world industrial economy.”
And the Feds probably believe that will go on forever. For the U.S. dollar to be rising recently in the wake of the $7 Trillion+ worth of bailouts has no doubt convinced our leaders that the rules of monetary policy really don’t apply to us. So I wouldn’t be surprised to see $5 or even $10 Trillion/yr. deficits in the near future.
God, it must be great to have the exclusive franchise on counterfeiting. Zimbabwe must be sooo jealous of us.