On America's $1 Trillion Deficit

by: James Quinn

Funny how the Treasury Dept released the YTD budget deficit for the United States of America and no one from the Obama administration went on TV to pronounce what a fine job they had done. They deserve huge accolades. It ain’t easy to run a $1 TRILLION DEFICIT in just 9 months. Click the link here (.pdf) for the grisly details. Remember in January 2009 when Obama and his minions said we must deficit spend to keep unemployment at 8%. He assured the American people that if we spent this money we would create 3 million jobs. It is now 18 months later. The number of Americans employed in January 2009 totaled 142,099,000. As of June 2010 there are 139,119,000 Americans employed. By my math, we have lost 2,980,000 jobs since Obama promised to add 3 million jobs. I guess a 6 million deviation is just a rounding error in Washington DC. At least the Wall Street bankers got their billion dollar bonuses while real Americans lost their jobs.

The good news is that Obama was able to drive up the deficit by $2.087 trillion during these 18 months. This is Keynesian socialism at its best. Paul Krugman will argue that if Obama hadn’t been so austere with his spending, it would have worked. If government had just dug a few more ditches and then filled them up, the economy would be booming.

The best part of this Treasury Department release is that if you actually go to another part of their website, you can see that the National Debt has gone from $11.910 TRILLION on October 1, 2009 to $13.203 TRILLION on June 30,2010. You may have noticed that the National Debt has gone up by $1.293 TRILLION in 9 months versus the Deficit announced by the Treasury of ONLY $1.004 TRILLION. What prey tell is the difference. It seems that we ignore that nasty interest on the debt of $289 BILLION when taking into account the current year deficit. Isn’t that precious? Wouldn’t you like to ignore the interest on your mortgage, credit card and auto loans when calculating your cash flow?

The truth is that the National Debt will increase by $1.7 TRILLION in 2010. Do you understand what that means? I don’t think you do. It means our politicians are squandering your money, that we do not have, borrowed from the Chinese, at these rates:

  • $4.7 BILLION PER DAY
  • $194 MILLION PER HOUR
  • $3.2 MILLION PER MINUTE
  • $54,000 PER SECOND

This will surely end well. Time to buy stocks. All is well.