Monday, February 14, 2011

US debt to exceed GDP in 2011

Take a look at this article and judge for yourself.

A few of the more salient points:

1.  2011 deficit is going to be around $1.65 trillion.
So the 2010 deficit was $1.4 trillion and the 2011 deficit estimate is $1.65 trillion.  Can anyone spot the problem here?  The deficit is increasing.

2.  The initial estimates for the 2011 deficit were $1.4 trillion and if you take that number and subtract it from the revised estimate, you have $245 billion.  This means that the estimation errors made by people trying to pin down Obama's actual deficit figure will be are larger than the entire deficit in 2007.

3.  Obama is proposing to cut $1.1 trillion from the deficit over 10 years.  This amount of money is beyond miniscule.  Consider that it is decreasing the deficit by $100 billion per year.  That amount is about 2.9% of the current amount of government spending.  Not exactly cinching up the belt another notch.  And notice that they aren't talking in concrete terms.  Nothing is said about eliminating the deficit unless you consider this piece of self contradicting crap from one of Obama's mathematically challenged, fellow Democrat:

White House budget Director Jacob “Jack” Lew said the goal was to get to a point where the debt is at least stabilized by the middle of the decade.

“The government will no longer be adding to our debts, and as a share of the economy, we’re going to stabilize the deficit,” he told reporters. “We’ll, in short, be paying for what we spend every year. The goal, to put it simply, is for the deficit to be in the range of 3 percent of our economy by the middle of the decade.”
Lew-ser.

Well, actually, a deficit of 3% of the US economy is still massive.  And yes, any deficit number will definitely be adding to the debt.  How about this:  How about we start changing the dialogue a bit here and begin talking about actual surpluses.  How about a surplus of 3%.  In terms of economic health, wouldn't that be a little, well, healthier?

Sometimes you have to watch what these guys are saying because they tend to mentally wander off into their little dreamscape that they have constantly running in their brain.  Lew-ser was probably deep in thought about a time in the not so distant future when $400B - $500B USD is such a small sum of money it's insignificant.  We will all be living, carbon neutral, in our very own shanty town shack, outside the mine where we work.  A mine owned by a Chinese conglomerate.  And it will cost $1B USD to buy bread down at the bread line.

4.  The US debt will exceed the size of its economy in 2011.

It's over for the US and it can be solely attributed to Barack Obama.

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