Filed under: Economy, Politics, Statism | Tags: Economics. The Budget, Spending, The Deficit
The federal deficit climbed higher in July, reaching record territory at $1.27 trillion with two months to spend remaining in the budget year. Ouch! Let’s be clear. This is the deficit — outgo over income. The July deficit reflected government outlays of $332.2 billion, a record number for any month, up from $263 billion of July 2008. Government receipts totaled $151.5 billion, so there is a bit of a gap. Quite a credit-card debt for us to pay off.
When Barack Obama came into office, the deficit was $455 billion. ($325.3 billion of that was from the bank rescue plan that Senator Obama supported).
Since January 20, we have had a $787 billion stimulus, a $33 billion expansion of the State Childrens’ Health Insurance Program (SCHIP), $330.4 billion in bank rescue money, and a $410 billion bill to fund discretionary spending for the second half of the current fiscal year. The first “Cash for Clunkers” program was part of the Stimulus, but I think they appropriated another billion for more clunkers. I don’t know where the auto bailout fits in. Congress is talking about a second stimulus, but perhaps that will go the way of the Nancy Pelosi Air Force which, blessedly, has been canceled. Sanity, however briefly, has prevailed.
Most of the stimulus money that has been appropriated has not yet been spent, and most of what has been spent has gone to Democrat pet projects rather than to anything that promotes employment. A lot has just been wasted. Homeless funds for a town that has no homeless, guard rails for a road beside a dry lake, funds to rebuild bridges that get almost no traffic at all. When the second part of the stimulus has been spent in 2010, perhaps it will be spent more wisely. Or even better, perhaps it will just be cancelled. Stimulus plans have never been a particularly successful way of addressing recessions.
Republicans usually favor programs that improve conditions for business so that they are encouraged to hire and produce. Democrats usually favor programs that create temporary government-paid jobs. One of the two has a history of success.
The total national debt is $11,666,485,985,008. give or take a billion or two here and there. U.S. Treasury Secretary Timothy Geithner asked Congress to increase the $12.1 trillion debt limit last Friday, saying it is “critically important” that they act in the next two months. In a letter to U.S. lawmakers, Mr. Geithner said that the current debt limit could be reached in early mid-October. “Congress has never failed to raise the debt limit when necessary,” Mr. Geithner said.
So that’s where we are. ObamaCare is projected by the CBO to cost $1.1 trillion for the House bill and a little more for the Senate bill which is still under construction over the next decade. Dr, Stephen Parente of Minnesota’s Carlson School of Management says that the CBO is using outdated programs and the bills will cost $2.1 trillion and $2.4 trillion respectively.
It looks like consideration of the Waxman-Markey climate bill will be put off until next year at least. I won’t include the depressing news about that. If we could just persuade them to stop spending, forget the rest of the stimulus and allow the economy to recover — which it would be more likely to do if there is confidence about what the government is going to do.
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