How would this affect the US stock market in the short-term and in the long-term ? ============================================= On top of this year's estimated $304bn deficit, the cumulative deficit between 2004 and 2008 would rise from the previous estimate of $114bn to $1,084bn. http://news.ft.com/servlet/ContentS...y&c=StoryFT&cid=1042491435561&p=1012571727088
Depends on how much gubment spending is curbed or increased. How many safety net programs are added to the whole mixture is important too. If the deficit is based upon the shrinking tax revenues, that's one thing. If it is because of runaway long range spending plans, that's another. The whole issue is mute if the powers all realize that the government makes no money and reacts accordingly. Their spending should be tied directly to the previous year's tax receipts. That would quickly cause some major crying on the hills. Hmm, another novel concept, spend only what you physically have.