U.S. Deficit to Reach Record $490 Billion in 2009 (Update3)
By Roger Runningen
July 28 (Bloomberg) -- The U.S. budget deficit will widen to a record of about $490 billion next year, an administration official said, leaving a deep budget hole that will constrain the next president's tax and spending plans.
The projected deficit for the fiscal year that begins Oct. 1 is higher than the $407 billion forecast by President George W. Bush in February. The bigger shortfall reflects dwindling tax receipts because of the U.S. economic slowdown, the cost of a $168 billion economic stimulus package and spending on the wars in Iraq and Afghanistan.
I listened to Rush Limbaugh on my way in this morning. I like Rush -- not as a human being, I have some skepticism about him at that level -- but as an entertainer. He's witty, though you have to listen to him for a while before you get that, and if you're a liberal the stuff he's witty about is liable to annoy you. But at one point he had a voiceover "tribute to Rush" -- from a guy who said that the core of conservatism was freedom and limited government....
I won't argue freedom; it means different things to different people, though if you're a gay couple who wants to marry the conservative idea of freedom probably looks a lot like bigotry. But escaping that --
I believe in limited government. It's one of the things that, back in the day, used to draw me toward conservative candidates. (I used to describe myself, back then, as a conservative Democrat ... by the time we got into the scorched-earth 90s, "conservative Democrat" parsed as "liberal" for all practical purposes. So I adopted "liberal" without too much difficulty; liberals are the people who disagree with conservatives, and there I am.)
"You're not a liberal," some of my conservative friends write me, "because you believe in X, Y, and Z! And so do we!"
No. Ronald Reagan started this; back in 1979 he campaigned on the idea that deficit spending was a moral evil. I agreed with him then and agree with him now. But the Reagan Administration presided over an astonishing growth in the federal deficit: the Reagan Administration's borrowing took the United States from the world's largest creditor nation to the world's largest debtor, in eight years.
Bill Clinton, with an assist from George Bush Senior, helped put this country back on the road toward sane fiscal policy. And, to be fair, with a little help from the conservative-run House and Senate Clinton had to deal with in 1994, though if you look at the deficit figures, they'd begun a substantial decline before Republicans took the House. But one really interesting stat from the boom boom 90s was the growth in state budgets. Which states had the least growth in spending during that time? In order, it went:
1. States with Democratic governors and Republican legislatures
2. States with Republican governors and Democratic legislatures
3. States with Democratic governors and Democratic legislatures
4. States with Republican governors and Republican legislatures
See #4? That's what happened when Bush and the Republican House and Republican Senate took over this country in 2000 ...
As recently as 2000 Republicans could argue, with a straight face, that they were more fiscally responsible than Democrats. (I disagreed with them, but it wasn't a ludicrous argument on the face.) But the Bush Administration set out to destroy this country's financial security, and succeeded.
In November of 2000, the Euro was worth .85 dollars. As of today it's worth 1.57 dollars.
In 2000, a barrel of crude averaged $28 per barrel. Today people are thrilled that crude's dropped to $125 a barrel; it was close to $150 earlier this year. Oil companies have enjoyed the greatest profits in the history of the world....and how are you doing, bunky?
The budget surplus in 2000 was 236 billion dollars. When George Bush leaves office it'll be a 490 billion dollar deficit: a swing of 725 billion dollars a year.
There was a run at IndyMac -- a local bank, where I live. People were lined up a few short miles from my house, panicked that they wouldn't get their money back. And IndyMac wasn't even on the FDIC watch list.
Seven banks have failed this year. Seven. In July. Washington Mutual -- where I banked, until recently -- lost 3.3 billion dollars -- in the second quarter of this year.
In 2000, if you'd tried to sell an SF story with all these various disasters occurring by 2008, people would have laughed at you.
Latest Gallup tracking poll had Obama up on McCain by 9 points -- a short bump; I assume things will tighten up down the stretch. But I'm amazed that it's even that close.
Water runs downhill. I don't know if it's reached the bottom yetl; I doubt it. Another Great Depression wouldn't surprise me: this country isn't just broke, it's deep, deep in the hole. We owe everyone. We owe Europe, we owe Saudi Arabia, we owe China, we owe Russia -- the whole world is holding American notes. Buddy, they own us.
And yeah; a few of the sheep have looked up. But only a few.
I have a hard time believing this was an accident. Leave George Bush out of it, you all know what I think about the guy; but the people surrounding him are not this incompetent. You have to operate out of the assumption that this was the intended result: that these people, with malice aforethought, set out to weaken this country and strengthen the multionational corporations from whom Bush and Cheney have always taken their marching orders.
There's a Mission Accomplished for you.