First of all, the CBO is engaged in a little misdirection, even though perhaps unwittingly. The true deficit is higher than they are reporting, because the CBO mainly looks at tax revenues less expenditures in the budget. However, our government spends a lot of money through emergency appropriations and other ways that aren't tracked in the headline numbers. So if you want to know what the true deficit looks like, you need to look at the ending balance of our debt every year and subtract the balance of the prior year. By that more accurate measure, the deficit for FY'12 is higher than that of FY'11. No improvement at all.
In addition, remember that 2013 hasn't hit yet. That's when a lot of Obamacare's new provisions hit in full force. Also, it's likely that Congress will kick the can down the road again on the fiscal cliff, which will add even more to the deficit. Lastly, as RW posted, we have a giant cohort called the Baby Boomers who are retiring and will be net withdrawers from Treasury, instead of net contributors. The bottom line is that over the next 5-10 years, we have a tsunami of spending coming our way and tax revenues will continue to be under pressure with this anemic recovery exacerbated by the savings and investment destruction by the Fed. Things are going to get worse before they get better. We're already in an unrecognized recession right now. Earnings are about to be terrible. Mark my words.
from treasurydirect.gov
Debt:
FYE'08 = 10,124,225,067,127.69
FYE'09 = 11,920,519,164,319.42
FYE'10 = 13,610,847,585,810.09
FYE'11 = 14,837,099,271,196.71
FYE'12 = 16,066,241,407,385.89
TRUE ANNUAL DEFICIT:
FY'09 = 1,796,294,097,191.73
FY'10 = 1,690,328,421,490.67
FY'11 = 1,226,251,685,386.62
FY'12 = 1,229,142,136,189.18 |
