US Deficit worst since WWII

MattW

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http://money.cnn.com/2009/10/16/news/economy/treasury_deficit/index.htm?postversion=2009101615

The Obama administration on Friday said the government ran a $1.42 trillion deficit in fiscal year 2009.
That made it the worst year on record since World War II, according to data from the Treasury and the White House Office of Management and Budget.
Tax receipts for the year fell 16.6% overall, while spending soared18.2% compared to fiscal year 2008. The causes: rising unemployment, the economic slowdown and the extraordinary measures taken by lawmakers to stem the economic meltdown that hit in fall 2008.
Consequently, the annual deficit rose 212% to the record dollar amount of $1.42 trillion, from $455 billion a year earlier.
As a share of the economy, the deficit accounted for 10% of gross domestic product, up from 3.2% in 2008.
That's without a spanking new healthcare bill for the government to pay.

As breath-taking as that may be, it's still not in the same stratosphere as the 1945 deficit, which hit 21% of GDP.
Well, as long as it's not that bad.... They were only fighting a global war - we've gotta deal with Lehman Bros and GM!

It may not be the same "stratosphere," but if it can triple in one year, it can double again next year.
 

MattW

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Also from the article:

As a result, the country is very near to breaching its so-called debt ceiling, currently set at $12.1 trillion. Lawmakers, however, are expected to vote to raise that ceiling this fall.

At the end of September, the country's total debt -- which is an accumulation of all annual deficits to date plus other obligations -- stood at $11.9 trillion.
I'm glad we have a solution! Maybe those unemployed Americans in foreclosure should just ask their credit card companies to raise their limits, and pay for everything that way.
 

MattW

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10% of the GDP. Big deal.

I remember everyone whining about the last HUGE MONSTROUS deficit that was run up during the Reagan years and that was cleared up in no time under Clinton.
There doesn't seem to be anyone interested in stopping spending, much less using surplus to pay off debt. There is no plan to prioritize needs - if the economy goes bad, just lump more spending on top. Hell, let's just add more on top anyway because timing isn't really important...

Doesn't the blip about congress raising the debt ceiling sound unpromising?
 

Bird of Prey

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What's the alternative, Matt? Which war do you want to end? Whose medicare gets cut off? Which banks would you like to see go under? Whose social security check do you want frozen? Who doesn't get food stamps? Whose house doesn't get rebuilt in New Orleans? Which levy doesn't get fixed? What state doesn't get help because the property values have sunk so low and unemployment is over nine percent? What kid doesn't get lunch?
 

MattW

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What's the alternative, Matt? Which war do you want to end? Whose medicare gets cut off? Which banks would you like to see go under? Whose social security check do you want frozen? Who doesn't get food stamps? Whose house doesn't get rebuilt in New Orleans? Which levy doesn't get fixed? What state doesn't get help because the property values have sunk so low and unemployment is over nine percent? What kid doesn't get lunch?
I'm not saying that there isn't a place for government services, so don't paint me as someone who won't care about starving kids, drowning cities, or sick and homeless old folks.

When does it end though? When does the well run dry, or do we keep drilling for everything which appears to be a necessity? We seemed to be doing ok for the past 65 years, weathering significant downturns and unemployment without tripling deficit expenditures.

Do you think that every line item in ARRA is actually helping to improve the lot of the downtrodden? Creating sustainable jobs? Building a better America? That's only one piece of legislation, not the entire budget with pet projects, earmarks, and guaranteed spending for hundreds of other projects which at least someone perceives as a necessity.

Worst of all though, this is the continuation of a debt cycle that the US government relies on to get out of bad times, but that barely relents during growth periods. When overspending becomes routine in citizens, we get bubbles and bankruptcy when the illusion falters. When government overspending gets routine, they get reelected.
 

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It's happened before.

http://conceptualmath.org/philo/fedbgt.htm

The Reagan years began with a tax cut. That was never matched by a spending cut. After that, revenues never caught up with spending. This resulted in the largest deficit since WWII....

George W. Bush, along with the Republican congress increased discresionary spending 26%, the largest increase since WWII. They also decreased revenues with a large tax cut given primarily to the rich. This combination led to the worst increase in the deficit since WWII.

I didn't just pluck out the Republicans, either :)
 

Gregg

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What's the alternative, Matt? Which war do you want to end? Whose medicare gets cut off? Which banks would you like to see go under? Whose social security check do you want frozen? Who doesn't get food stamps? Whose house doesn't get rebuilt in New Orleans? Which levy doesn't get fixed? What state doesn't get help because the property values have sunk so low and unemployment is over nine percent? What kid doesn't get lunch?


Is the only answer more government?
There is tons of private money out there. And believe it or not, many wealthy individuals and families have established charitable foundations to help people in need. Not to mention organizations like The United Way.
Shouldn't the government encourage more private giving?
The government deals in millions and billions of dollars. Lots of organizations need thousands and wouldn't know what to do with a million.
 

History_Chick

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There is a ton of waste out there but no one seems to stop it.

In NY at the end of Aug those receiving welfare were given 250 PER CHILD. This was given to them in their account so they could buy school clothes or supplies. Do you think they did that? Ummm no. Instead of giving it to local charities they give it to th epeople to buy beer and other things with. Oh and there was no restrictions on the money. And no way to track to see how it was spent. Brilliant!

Then there was the stupid waste on signs that said a road project was part of the goverment works project(I forgot what it was called). Each sign was about 50,000 or was it 500,000..I have forgotten but COMMON.

Its things like this that get my knickers in a knot. Not to mention the 250 that the elderly are going to get cause they didn't get a raise this year. Well, a lot of people aren't getting raises.

If we cut back on the stupid stuff it would help. I dont think its the answer, but it would help a tad.

This government likes to piss away money.
 

Alpha Echo

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There is a ton of waste out there but no one seems to stop it.

In NY at the end of Aug those receiving welfare were given 250 PER CHILD. This was given to them in their account so they could buy school clothes or supplies. Do you think they did that? Ummm no. Instead of giving it to local charities they give it to th epeople to buy beer and other things with. Oh and there was no restrictions on the money. And no way to track to see how it was spent. Brilliant!

Then there was the stupid waste on signs that said a road project was part of the goverment works project(I forgot what it was called). Each sign was about 50,000 or was it 500,000..I have forgotten but COMMON.

Its things like this that get my knickers in a knot. Not to mention the 250 that the elderly are going to get cause they didn't get a raise this year. Well, a lot of people aren't getting raises.

If we cut back on the stupid stuff it would help. I dont think its the answer, but it would help a tad.

This government likes to piss away money.

I never heard any of that - and I'm not necessarily doubting your claims, but do you have a quote for either the signs or the wellfare stuff?
 

Romantic Heretic

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It's a given, doncha know?

Everyone on welfare or any sort of government support is a lazy wastrel who has never worked a day in their lives and never will. ;)
 

MattW

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It's a given, doncha know?

Everyone on welfare or any sort of government support is a lazy wastrel who has never worked a day in their lives and never will. ;)
But it's also known that everyone on welfare would give it up in a second if they could work for it, procreates responsibly, and would never, ever vote for anyone on the basis of how much more they could wring out of the system.

Reality is probably spread between these two extremes...
 

Bird of Prey

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Is the only answer more government?
There is tons of private money out there. And believe it or not, many wealthy individuals and families have established charitable foundations to help people in need. Not to mention organizations like The United Way.
Shouldn't the government encourage more private giving?
The government deals in millions and billions of dollars. Lots of organizations need thousands and wouldn't know what to do with a million.


The government can encourage, Gregg, but ultimately the government is responsible to and responsible for the citizens of the country. Private donations are capricious at best. They don't insure that the poor have something to eat as a matter of policy. And charity is all fine and dandy but depending on it means offering private organizations all kinds of power that they shouldn't have. . . .
 

Gregg

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I'd rather think that the government is responsible to the citizens than for them.

Private foundations are regulated by the government, and while there have been abuses in the past, most foundations are honest and provide valuable funding for many different needs. They get money directly to the need, rather than passing it through a bureaucracy. I speak from experience, here.
For example, if you want to help an after-school tutoring program in an inner city, the last place you'd give money is the school district - the money would disappear. Instead, you give it to the church down the street that hosts the tutoring sessions.

Having a policy to eliminate hunger doesn't get food to people. Helping the local food bank does.
 

Don

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Agorism FTW!
Having a policy to eliminate hunger doesn't get food to people.
Data from here (US Census Bureau):
Families in poverty in 1968: 10.0%
Families in poverty in 2008, after 40 years of The War on Poverty: 10.3%

At least that's better results than we've had with The War on Drugs. :)
 

Gregg

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Thanks Don.
How many billions did we spend to increase the poverty rate?
But even more troublesome is the increase in single parent families - mostly with moms as the parent.