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Let's look at what happened with the federal budget last month. We had sequestration, which cut Washington's spending. So are the sequestration cuts going to continue? Not a chance.
Next we have the repayments of bailout money by Fannie Mae and Freddie Mac, which constitute $66 billion of the $116.5 billion surplus (more than half). Nice, but if I loaned $50,000 to a needy relative and he made quarterly $2,500 payments to me a year later, it doesn't mean that I'm in much better shape financially this year than I was before the payment.
And of course we have higher taxes, up 10% since last year. Whoopie. I'm sure feeling WAY MORE prosperous when government takes an extra 10% (remember 2% of this tax increase is just because of the expiration of the Social Security tax cuts).
The federal government has still spent $510 billion more than it collected in taxes so far this year. That's added to the $17 trillion federal debt.
I don't know you or the other posters here as I come here infrequently. So I have no way of knowing if you are left, right or center, nor will I assume you are a raving liberal just because you started this thread.
However, I must object to the terminology used, saying we had a budget surplus. These terms imply something to the low information voter/populace that are simply not true. We will not have a budget surplus for a very long time, regardless of which party is in the White House, or controlling Congress. So even if things are not as bad as predicted, or we even have a better than expected month here and there, we are in such a deep hole, that pronouncements like this actually do more harm than good.
We all need to be screaming bloody murder at our elected Representatives (regardless of party affiliation) to get our house in order.
Even if we have a few spectacular months, we need to demand answers as to why it has taken so long, and what will they be doing to sustain it.
I liken it to a family who is in financial ruin, yet the Dad brings home a raise of $0.10 per hour, and little Kate made $3.00 on lemonade sales. Sure it is something, but not anywhere near enough to get out of the hole they created.
The misconception that you employ is to equate a national economy to a family's economy. The problem the nation faces, and these numbers prove, is that the nation doesn't have a fiscal problem. But it does still have an unemployment problem. Thus, it makes no sense focusing on trying to balance the budget when millions are unemployed. Trying to cut spending to balance the budget prolongs the unemployment problem.
Why isn't an economy like a family budget? The key point is realizing interdependence: your spending is my income, my spending is your income, and if we all try to slash spending at the same time the result is a depression. Somebody needs to step up and spend when others won’t -- and the government is that somebody.
The debt is still going up because we won't repeat June's success every month - but even considering that, the yearly deficit is FALLING, and falling fast. Unless it goes away entirely of course the national debt will still continue to climb.
Ken
Be sure to let us know when it gets back to "W" levels.
Was Bush President on January 7, 2009? Because this was the CNN headline:
Quote:
$1.2 trillion deficit looms
Housing collapse and financial turmoil leads to steep rise in estimated U.S. shortfall for '09, Congressional Budget Office says.
By Jeanne Sahadi, CNNMoney.com senior writer
Last Updated: January 7, 2009: 5:00 PM ET
NEW YORK (CNNMoney.com) -- The U.S. budget deficit in 2009 is projected to spike to a record $1.2 trillion, or 8.3% of gross domestic product, the Congressional Budget Office said Wednesday.
So much for the silly theory that Obama was going to bankrupt us. As the economy continues it's slow but steady recovery, the deficit is falling rapidly and tax revenue has ALREADY risen beyond the pre-recession levels.
"The U.S. government posted a budget surplus in June, the latest sign of rapidly improving public finances that could reduce the urgency in Congress to strike a deal to raise the nation's limit on borrowing.
Rising tax revenues, public spending cuts and big payments to the Treasury from state-backed mortgage firms helped the government take in $117 billion more last month than it paid out, the U.S. Treasury said on Thursday.
Analysts polled by Reuters had expected a smaller surplus of $39.5 billion.
June's surplus was the largest for that month on record..."
Didn't you just get done telling me the other day that the Agency MBS purchase program of the FR barely affects the economy? Now you're posting a link where the majority of the "surplus" came from GSEs who've been receiving $40 billion/month for, what, two years or longer...
Was Bush President on January 7, 2009? Because this was the CNN headline:
I think its weird that you blame Bush for Obama spending, and the only time Obama is responsible for anything is when its good news.
hypocrite.
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