Budget deficit triples to $1.4 trillion, setting new record.

[one...two...tree 2,762]

I'll place my bet on Keynesian Economics over Trickle Down Economics any time or day of the week. The historical facts speak for themselves, regardless of what history revisionists try to spin them as.

I would rather trust an economic policy that truly reflected a global and interdependent set of economies, rather than one over half a century old that was very insular in its outlook. Times have moved on since Keynes, but economic theory isn't a glamour subject, so no-one has taken up the reins and brought it into the 21st Century.

The mechanisms of an economy are unchanged though, Pooky, so Keynes is far from being outdated or irrelevant.

[mawilson 2,133]

I understand that. We need to find a new catalyst to drive our economy and I'm convinced alternative energy could be that catalyst. The housing market really put us into a spin because people were spending on artificial credit created from a bubble that nobody wanted to see burst.

However, I don't see how we can avoid consumption being a large factor in our economy. We just need to be smarter about it.

Consumption is and will remain a large factor. I just don't think it can GROW the way

it did in 1998-2007. At best, consumption can grow in line with disposable income.

I'm not convinced alternative energy can create wealth. Are we going to sell / export

energy to the rest of the world?

Energy is a means to an end. We use energy to build other things that matter.

Energy should be produced as cheaply as possible, because higher energy costs

will divert resources from other, more productive, sectors of the economy.

[Pooky 3,347]

I'll place my bet on Keynesian Economics over Trickle Down Economics any time or day of the week. The historical facts speak for themselves, regardless of what history revisionists try to spin them as.

I would rather trust an economic policy that truly reflected a global and interdependent set of economies, rather than one over half a century old that was very insular in its outlook. Times have moved on since Keynes, but economic theory isn't a glamour subject, so no-one has taken up the reins and brought it into the 21st Century.

The mechanisms of an economy are unchanged though, Pooky, so Keynes is far from being outdated or irrelevant.

But the mechanisms have changed. Keynes theories never took into account the different levels of the economies, the lack of parity between the sources of supply and the demand. If anything, Keynes theories are too simplistic for the global economy we now live in.

[one...two...tree 2,762]

I'll place my bet on Keynesian Economics over Trickle Down Economics any time or day of the week. The historical facts speak for themselves, regardless of what history revisionists try to spin them as.

I would rather trust an economic policy that truly reflected a global and interdependent set of economies, rather than one over half a century old that was very insular in its outlook. Times have moved on since Keynes, but economic theory isn't a glamour subject, so no-one has taken up the reins and brought it into the 21st Century.

The mechanisms of an economy are unchanged though, Pooky, so Keynes is far from being outdated or irrelevant.

But the mechanisms have changed.

Such as?

[I AM NOT THAT GUY 5,715]

Interesting calculation here - the budget deficit triples to 1.4 trillion. Hence, we're saying that the deficit was 1/3 of said 1.4 trillion last FY, yes? That would be roughly 466 billion.

Now, the federal debt outstanding on 9/30/07 was 9 trillion dollars. On 9/30/08 - one year later after having run a 466 billion deficit - the outstanding debt should be 9.47 trillion dollars, right? Oddly, the outstanding debt on the latter date was 10 trillion dollars suggesting that that feds had a trillion dollars worth of red ink during the previous FY. Just saying...

http://www.treasurydirect.gov/govt/reports...debt_histo5.htm

Much of that debt is debt the government owes itself, in other words, money they have collected for one purpose, but spent on something else. The biggest holder of US debt is the US Government, commonly referred to as IOU's, or more accurately referred to as unfunded liabilities.

[scandal 951]

I understand that. We need to find a new catalyst to drive our economy and I'm convinced alternative energy could be that catalyst. The housing market really put us into a spin because people were spending on artificial credit created from a bubble that nobody wanted to see burst.

However, I don't see how we can avoid consumption being a large factor in our economy. We just need to be smarter about it.

Consumption is and will remain a large factor. I just don't think it can GROW the way

it did in 1998-2007. At best, consumption can grow in line with disposable income.

I'm not convinced alternative energy can create wealth. Are we going to sell / export

energy to the rest of the world?

Energy is a means to an end. We use energy to build other things that matter.

Energy should be produced as cheaply as possible, because higher energy costs

will divert resources from other, more productive, sectors of the economy.

Consumption can grow if the population grows. Solution: Add more immigrants, especially ones that need to buy new stuff, rent apartments, buy cars, and can become part of the productive labor force. Encouraging additional immigration is political suicide in a climate of high unemployment with people losing their jobs, and with America's well known illegal immigration problem.

But for the US to resume its long term trajectory of GDP growth fueled by consumption, we should seriously consider upping our immigration targets significantly.

As to alternative energy - I don't share Steve's optimism. Alternative fuels, solar panel factories, biofuel plants etc. will be a growth sector certainly. But to think that this sector will make up a significant segment of the overall US economy seems fantasy to me. Even now, if you combine the entire energy sector (combine ExxonMobil and oil companies with nuclear plants, utilities, etc.) I doubt you get to beyond 20% of the total economy. If alternatives make up even a real fraction of that in a generation - say 50%, to be pollyanna about it - you still are dealing with about 10% of the total economy (my numbers are made up, not researched, but probably not wildly off base).

I do think the sector could play a leading role in certain states or regions that embrace it early (Jennifer Granham in Michigan is aiming to do just that, to compensate for the devastated auto sector).

[I AM NOT THAT GUY 5,715]

What is the difference between the public debt and the deficit?

The deficit is the difference between the money Government takes in, called receipts, and what the Government spends, called outlays, each year. Receipts include the money the Government takes in from income, excise and social insurance taxes as well as fees and other income. Outlays include all Federal spending including social security and Medicare benefits along with all other spending ranging from medical research to interest payments on the debt. When there is a deficit, Treasury must borrow the money needed for the government to pay its bills.

We borrow the money by selling Treasury securities like T-bills, notes, Treasury Inflation-Protected securities and savings bonds to the public. Additionally, the Government Trust Funds are required by law to invest accumulated surpluses in Treasury securities. The Treasury securities issued to the public and to the Government Trust Funds (intragovernmental holdings) then become part of the total debt.

One way to think about the debt is as accumulated deficits. For information concerning the deficit, visit the Financial Management Service website to view the Monthly Treasury Statement of Receipts and Outlays of the United States Government. You can read more on this topic in the Federal Borrowing and Debt chapter of the Analytical Perspectives volume of the most recent budget.

http://www.treasurydirect.gov/news/pressro...bpd08052004.htm

(Annual Deficits Projected)

Edited October 9, 2009 by Lone Ranger

[scandal 951]

Interesting calculation here - the budget deficit triples to 1.4 trillion. Hence, we're saying that the deficit was 1/3 of said 1.4 trillion last FY, yes? That would be roughly 466 billion.

Now, the federal debt outstanding on 9/30/07 was 9 trillion dollars. On 9/30/08 - one year later after having run a 466 billion deficit - the outstanding debt should be 9.47 trillion dollars, right? Oddly, the outstanding debt on the latter date was 10 trillion dollars suggesting that that feds had a trillion dollars worth of red ink during the previous FY. Just saying...

http://www.treasurydirect.gov/govt/reports...debt_histo5.htm

Much of that debt is debt the government owes itself, in other words, money they have collected for one purpose, but spent on something else. The biggest holder of US debt is the US Government, commonly referred to as IOU's, or more accurately referred to as unfunded liabilities.

The social security lockbox consists of excess money collected by Social Security and "borrowed" by the general budget plan, each year. Pretty soon now SS will not be running annual surpluses and will be wanting that money back......

[I AM NOT THAT GUY 5,715]

Interesting calculation here - the budget deficit triples to 1.4 trillion. Hence, we're saying that the deficit was 1/3 of said 1.4 trillion last FY, yes? That would be roughly 466 billion.

Now, the federal debt outstanding on 9/30/07 was 9 trillion dollars. On 9/30/08 - one year later after having run a 466 billion deficit - the outstanding debt should be 9.47 trillion dollars, right? Oddly, the outstanding debt on the latter date was 10 trillion dollars suggesting that that feds had a trillion dollars worth of red ink during the previous FY. Just saying...

http://www.treasurydirect.gov/govt/reports...debt_histo5.htm

Much of that debt is debt the government owes itself, in other words, money they have collected for one purpose, but spent on something else. The biggest holder of US debt is the US Government, commonly referred to as IOU's, or more accurately referred to as unfunded liabilities.

The social security lockbox consists of excess money collected by Social Security and "borrowed" by the general budget plan, each year. Pretty soon now SS will not be running annual surpluses and will be wanting that money back......

This fiscal year, as a matter of fact. Because of all the early retirees, $18 billion of those IOU's will have to be redeemed this year for Social Security benefits.

[Ban Hammer 12,835]

i sure hope obama can do something about this once he takes office.

[luckytxn 2,263]

i sure hope obama can do something about this once he takes office.

Me too.

So far the plan seems to be to run up a historical monstrous deficit. The Feds take over 1/5th of the U.S. Economy. Embed a huge bureaucratic structure. Ramp up a war in the middle east. Tax the hill out of our wealthy that pretty much gives us all our employment. (So called wealthy anyway as most jobs come from small businesses) And next I hear he plans on giving amnesty to illegals. Have to like someone with a plan.

[I AM NOT THAT GUY 5,715]

i sure hope obama can do something about this once he takes office.

Me too.

So far the plan seems to be to run up a historical monstrous deficit. The Feds take over 1/5th of the U.S. Economy. Embed a huge bureaucratic structure. Ramp up a war in the middle east. Tax the hill out of our wealthy that pretty much gives us all our employment. (So called wealthy anyway as most jobs come from small businesses) And next I hear he plans on giving amnesty to illegals. Have to like someone with a plan.

About eight years ago, before 9-11, one of the talking heads on the right said that Bush's best plan was to spend the "suplus", and push us far enough into debt, that when the left regained control of Congress, there would not be any money to spend on liberal socialist programs.

Boy, was he wrong!

[luckytxn 2,263]

i sure hope obama can do something about this once he takes office.

Me too.

So far the plan seems to be to run up a historical monstrous deficit. The Feds take over 1/5th of the U.S. Economy. Embed a huge bureaucratic structure. Ramp up a war in the middle east. Tax the hill out of our wealthy that pretty much gives us all our employment. (So called wealthy anyway as most jobs come from small businesses) And next I hear he plans on giving amnesty to illegals. Have to like someone with a plan.

About eight years ago, before 9-11, one of the talking heads on the right said that Bush's best plan was to spend the "suplus", and push us far enough into debt, that when the left regained control of Congress, there would not be any money to spend on liberal socialist programs.

Boy, was he wrong!

Actually this was said way before Bush. I remember there was talk during the Reagan years and a former member in his administration had said the same thing. He also said the main goal was to keep inflation at bay so that our crushing debt would force the Socialists to curb Socialist programs. If inflation made our debt more manageable than the programs could be feasible.

Of course when the Neocons finally took all reigns of power they promptly spent more and gave us larger Governemnt and cut the taxes that should have paid for it to rev the economy up. They showed they were no better than the Socialists after all but damn now that they have taken over they showed they were no slackers at spending our money and giving us even larger Government and thus making the Neocons look more promising after all.

[dalegg 143]

i sure hope obama can do something about this once he takes office.

Me too.

So far the plan seems to be to run up a historical monstrous deficit. The Feds take over 1/5th of the U.S. Economy. Embed a huge bureaucratic structure. Ramp up a war in the middle east. Tax the hill out of our wealthy that pretty much gives us all our employment. (So called wealthy anyway as most jobs come from small businesses) And next I hear he plans on giving amnesty to illegals. Have to like someone with a plan.

About eight years ago, before 9-11, one of the talking heads on the right said that Bush's best plan was to spend the "suplus", and push us far enough into debt, that when the left regained control of Congress, there would not be any money to spend on liberal socialist programs.

Boy, was he wrong!

I remember hearing a commentator after the election say that Democrats wouldn't be able to write a bunch of checks the US couldn't cover because the Republicans have used up all the checks. I thought it was funny at the time, but what he didn't realize is that Democrats still have a lot of credit cards.

[DEDixon 39]

jobs jobs jobs... i remember nancy pelosi coming down hard on GWB about jobs about a year after 9/11 now want is she doing..... nothing.