The Atlantic reports the record setting April:
The United States set two budget records in April. First, the $82.7 billion monthly budget deficit was the highest ever for that month. Second, it was our 19th consecutive monthly deficit, the longest streak of red ink on the books.Rolfe Winkler the broader meaning of deficits:
Don’t look now, but total U.S. public debt outstanding is approaching $13 trillion.
Each incremental trillion is going by so quickly, it’s hardly news anymore…
$6 trillion: February 28, 2002
$7 trillion: January 15, 2004 (22.5 months)
$8 trillion: October 20, 2005 (21 months)
$9 trillion: August 31, 2007 (22 months)
$10 trillion: September 30, 2008 (13 months)
$11 trillion: March 16, 2009 (5.5 months)
$12 trillion: November 16, 2009 (8 months)
$13 trillion: May-June 2010 (6-7 months)
While the pace is rather astounding, what is interesting (to me) is that the pace of increase is actually much slower in nominal terms (i.e. steepness of the blue line) than what we saw throughout the 1970's (due to higher inflation) and 1980's (due to massive tax cuts to "starve the beast").
The result... the fastest increase in debt relative to GDP (i.e. the steepness of the red line) since WWII.
Source: Treasury Direct / BEA
Scary. This has the potential to end badly. Keynes has to be spinning in his grave to see how his theory has been grossly abused to put national economies into a dysfunctional state.
ReplyDeleteVery few people understand the exponential growth of money, and the maximum potential of all things be they living or a system.
ReplyDeleteWe will relearn this lesson once again. Every fix is a bit shorter than the last which goes to the heart of our problem. You can't get out of a debt implosion by taking on more debt, but they are certianly determined to try. Bread and circus for the whole house please!
Models of never ending growth tend to have that problem.
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