Budget Deficit Tops $1 Trillion For First Time

The AP reports that "the federal deficit has topped $1 trillion for the first time ever and could grow to nearly $2 trillion by this fall, intensifying fears about higher interest rates, inflation and the strength of the dollar... The soaring deficit is making Chinese and other foreign buyers of U.S. debt nervous, which could make them reluctant lenders down the road. It could also force the Treasury Department to pay higher interest rates to make U.S. debt attractive longer-term. 'These are mind-boggling numbers,' said Sung Won Sohn, an economist at the Smith School of Business at California State University. 'Our foreign investors from China and elsewhere are starting to have concerns about not only the value of the dollar but how safe their investments will be in the long run.'" The Obama administration's reckless spending is already leading to unprecedented deficits. And this is without Obamacare. How can this country afford this reckless fiscal policy? How can Obama seriously be proposing huge amounts of new spending on health care? Americans need to muster up the courage to rally against the bankrupting of this nation. As the AP notes, the there are very harmful ramifications of this kind of groundbreaking deficit spending, such as scaring off foreign investors, higher interest rates, inflation, and the devaluing of the dollar. The chart to the left should alarm any sane citizen of our great nation.

Reuters reports that "the U.S. government rang up a $94.32 billion budget deficit in June, a record for the month, as the price tag for efforts to prop up the economy, banks and automakers mounted while revenues weakened. The Treasury Department said on Monday that June marked the ninth straight month in which the government had run a deficit. In June 2008, the budget enjoyed a $33.55 billion surplus. Through the first nine months of fiscal 2009, the government has racked up a $1.086 trillion deficit. That compares with a shortfall of only $285.85 billion in the comparable year-ago period, underscoring the sharp deterioration in the U.S. fiscal picture." I would disagree. The "fiscal picture" of our nation certainly accounts for the lessening of government revenue (aka tax collection), but it in no way accounts for the spending by government. There is no way to show that without the massive amounts of spending by the Obama administration, and even the Bush administration in the TARP program, the economy would be worse today. In fact, Obama continues to propose more spending despite these numbers. I remember very clearly that liberals criticized George W. Bush for his deficit spending. Those were merely political games on the part of Democrats. Democrats are are not the party of fiscal responsibility. In truth, they could care less about deficits. One need only see the excess spending under Obama, and the proposals for continued excess spending, to undertstand this. Not surprisingly, the criticisms of deficits has disappeared from the liberal pundit talking points.

The Rueters article shows that this is the Obama deficit. I will admit that Republican non-defense spending under Bush crossed the line as well. The TARP bailout is the case in point. There was also the prescription drug benefit for seniors. However, the pace of the increase in government spending under Obama is unprecedented on uncomparable, even to Bush. Furthermore, unlike the liberal punditocracy, conservative talkers were willing to abandon partisan considerations and criticize Bush for his spending. The fact that the liberal talking heads remain silent on Obama's deficit shows how disingenuous they really are.