The incredible shrinking budget deficit, was $1.8T now $1.4T

Discussion in 'Wall St. News' started by tmarket, Oct 13, 2009.

  1. The CBO has now revised the deficit from $1.8 trillion earlier in the year to $1.4 trillion in a report last week.
    "The Congressional Budget Office was much in the news Wednesday when its cost estimate showed that the health care bill being considered by the Senate Finance Committee would reduce rather than increase the deficit.

    Far less prominent but no less important was another CBO report released that day — the monthly budget review with revised numbers for fiscal 2009. The bottom line: The deficit was about $1.4 trillion.

    Before this deficit is demonized to the point where it’s considered something appropriate for HBO’s “True Blood,” several things need to be explained.

    First, the new figure is much smaller than the $1.8 trillion estimate produced earlier in the year by the CBO. Big swings in deficit projections are often due to dramatic changes in economic conditions, but that wasn’t the case this time. Rather, the original estimate included two things that simply didn’t happen: $250 billion in additional bailout money that the White House included in its budget but ultimately didn’t request, and a plan to score Fannie Mae and Freddie Mac as federal entities.

    Those two were expected to cost about $400 mbillion — the difference between the original and final estimates.

    This doesn’t mean that the importance of the much lower deficit should be minimized. The $250 billion in additional bailout funds that ultimately wasn’t used is the equivalent of a spending cut. Depending on what makes you happy, you can call this either a rejection of a spending increase or a reduction from what was proposed.

    Either way, not only was federal spending in 2009 much lower than projected earlier in the year, this also is one of the largest one-year spending changes in recent federal budget history. The Obama administration, which decided not to pursue the additional bailout funds because the financial system was stabilizing without them, deserves credit for the improved deficit picture. So do those in Congress who sided with that approach.

    Second, $1.4 trillion obviously is way above the previous $459 billion record-high nominal deficit recorded in 2008. But contrary to much of the rhetoric surrounding this year’s budget debate, the new record deficit happened mostly because of the economy and not because the Obama administration pushed policy changes that increased spending. In fact, the CBO numbers show that almost all of the $1 trillion increase in the deficit from 2008 to 2009 would have happened regardless of who was elected president last November, or if George W. Bush had remained in office.

    The CBO estimated that federal revenues fell by almost $420 billion from what the government collected in 2008. Virtually all of this was because of the recession and the tax cut included in the stimulus bill, which was enacted to deal with the economy. The recession-related drop in revenues would have happened regardless of who was in the White House, and a Republican stimulus bill would have reduced taxes by at least as much."
  2. It is a f'ing miracle!!!! It so happens to just about coincide with the amount that the US has had to sh!t....or, I am sorry, I mean "excrement through 'Quantitative Easing'" up until now - WOW - inflation will be avoided. At least that is the BS number that the gov't has said that they have "QE'd" through September! Gee, we can umm say we "didn't have to use QE" - how convenient!!!

    Our gov't has stooped to the pathetic! I am planning my escape!

  3. ok i will put on my wingnut hat and see if i can figure out what they will say. let me guess. its a conspiricy. obama had the numbers changed so it looks better for him.
  4. Obama is a "droid!" It didn't matter whether McCain or Obama was chosen - the election would have been rigged either way. McObama is the "power elites'" bitch of choice! I don't fault him...or reward him. The smart individuals are not "playing the Obama game" - it is how do I get out of the US, while I still can!

    -tinfoil hat wearing gastropod
  5. ehorn


  6. dam. i guess i missed it. its a conspiricy but obama is not the leader. he is just a puppet too.
  7. Dawg - I know the truth!!! You have no idea how many people on this board agree with me...and just won't admit it! Please take the time to search out what I have said. BTW - I do not at all question your trading ability! You probably rock - better than me or a lot of the "traders" out here! That is NOT in question by what I have written. What IS in question is the viability of our nation!

  8. skylr33


    Give the dipshit, one term loser Obama another week, and the deficit will be above 2 trillion. :D
  9. That black boy sharp. He setup us for the higher numbers!