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Originally Posted by raytri";p="
Just to be clear, that article refers to the *trade* deficit, not the budget deficit.
This thread dang near gave me a heart attack before I figured that out.
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There have been several articles posted in this thread dealing with several different aspects of the financial problems facing the USA at this time.
One aspect is the 'trade deficit', as was discussed in the first article:
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So far this year, the (trade)deficit is running at an annual rate of $706.4 billion. This puts the country on track to far surpass the old (trade)deficit record of $617.6 billion set last year and gives critics ammunition to argue that President Bush's trade policies are not working.
The (trade)deficit with China jumped by 8.9 percent during the month to a record $20.1 billion and through September is running at an annual rate approaching $200 billion, far above last year's record (trade)deficit of $162 billion, which was the highest imbalance ever recorded with a single country.
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Second, there is US government debt to foreign countries, as the next article discussed:
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President Bush and the current administration have borrowed more money from foreign governments and banks than the previous 42 presidents combine.
According to the Treasury Department, from 1776-2000, the first 224 years of U.S. history, 42 U.S. presidents borrowed a combined $1.01 trillion from foreign governments and financial institutions, but in the past four years alone, the Bush administration borrowed $1.05 trillion.
"No American political leadership has ever willfully and deliberately mortgaged our country to foreign interests in the manner we have witnessed over the past four years," said Rep. John Tanner (D-Tenn.). "If this recklessness is not stopped, I truly believe our economic freedom as American citizens is in great jeopardy."
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Third, there is the budget deficit, which was discussed in several other articles thusly:
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Since the Bush administration took over in 2001, the federal budget balance has deteriorated rapidly, and the government deficit is expected to exceed 4 percent of gross domestic product for the current fiscal year.
"The United States is on course to increase its net external liabilities to around 40 percent of GDP within the next few years...this trend is likely to put pressure on the U.S. dollar, particularly because the current account deficit increasingly reflects low savings rather than high investment," the IMF stated.
...the pace in which the deficit was growing as well as its sheer size made the current account deficit a significant liability to U.S. economic prospects.
At the same time, the IMF warned that the evaporation of fiscal surpluses accumulated over the 1990s "has left the budget less well-prepared to cope with the retirement of the baby boom generation, which will begin later this decade and place massive pressure on the social security and Medicare systems."
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and also:
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Greenspan testified, "Indeed, under existing tax rates and reasonable assumptions about other spending, these projections make clear that the federal budget is on an unsustainable path, in which large deficits result in rising interest rates and ever-growing interest payments that augment deficits in future years. But most important, deficits as a percentage of GDP in these simulations rise without limit. Unless that trend is reversed, at some point these deficits would cause the economy to stagnate or worse."
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Fourth, there is the National Debt, which, as an article cited by Gian55 states, is now at
Eight Trillion, Seventy-Six Billion, Six Hundred and Sixty-Four Million and some odd change. That's
$8,076,664,180,833.05. If you have a
budget deficit and you
don't pay it, it turns into
debt. So, according to an article that JP cited without seeming to understand what it said, they are projecting that the deficit will roll over into debt to the tune of another
4.4 Trillion over the next ten years, bringing the projected total to over
12 Trillion, in the unlikely event that our economy even survives that long without meltdown.
11-10-2005, 07:39 PM
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