If stimulus worked, then why isn't it? The US has $1 trillion deficits for four years in a row. If that's not stimulus, what is? Since it isn't working, the next question is how are we going to pay for it?
While pondering those questions, please note US runs a 4th straight $1 trillion-plus budget gap.
The United States has now spent $1 trillion more than it's taken in for four straight years.
On 15 August 2008, the total U.S. public debt outstanding was just over $9.6 trillion (or if you're a stickler for accuracy, $9,606,975,957,798.46). Four years later, on 15 August 2012, the total public debt outstanding for the United States had risen to just over $15.9 trillion (or rather, $15,919,488,010,442.70). In four years then, the U.S. national debt rose by more than $6.3 trillion, or by 65.7% of its value in 2008.
Nice issue brief just released by the Congressional Budget Office. It explains that besides the “gradual consequences” of the gradual worsening of the fiscal outlook, there are these shorter-term risks to the economy:
As previously noted, according to the Congressional Budget Office, if congress sticks by current law the fiscal situation is more-or-less okay for the next 20-25 years. It’s also true that according to the CBO and most everyone you meet, Congress seems unlikely to do that. So the message here should be: “Congress! Don’t live up to your bad reputation!
WASHINGTON: The federal government ran up a much smaller budget deficit in August than a year ago, remaining on track to record the smallest annual deficit in eight years. The Treasury Department said Friday that the deficit in August totaled $64.4 billion, a drop of 50 per cent from the same month a year ago. Much of that improvement reflected quirks in timing related to the calendar. Some $42 billion in August benefit payments were made in July because Aug. 1 fell on a Saturday. Through the first 11 months of this budget year ending Sept.
WASHINGTON — U.S. intelligence officials said Wednesday that the government shutdown is seriously damaging the intelligence community’s ability to guard against threats. They said they’re keeping counterterrorism staff at work as well as those providing intelligence to troops in Afghanistan, but that the danger would increase daily with fewer spies to track targets.
This came as U.S. President Barack Obama summoned congressional leaders to the White House on Wednesday to discuss the shutdown.
By Simon Johnson
The United States faces some serious medium-term fiscal issues, but by any standard measure it does not face an immediate fiscal crisis. Overindebted countries typically have a hard time financing themselves when the world becomes riskier – yet turmoil in the Middle East is pushing down the interest rates on US government debt. We are still seen as a safe haven.
Yet leading commentators and politicians today repeat the line “we’re broke” and argue there is no alternative other than immediate spending cuts at the national and state level.