Federal Deficit on Pace to Reach $1 Trillion

Wednesday, December 10, 2008

The Federal government ran a record budget deficit in November, putting Uncle Sam on track to post an all-time high annual shortfall of $1 trillion or more.

In just the first two months of the budget year that started Oct. 1, the deficit totaled $401.6 billion, nearly matching the record gap of $455 billion posted for all of last year, according to Treasury Department data released Wednesday.

If the deficit does top $1 trillion for the current budget year, it also would be a post-World War II high when measured as a percentage of the economy.

The increased red ink stems from both lower tax revenue and increased spending that is a result of the recessionary economy.

There’s the $700 billion bank rescue program. The Treasury report showed that the government spent $76.5 billion from the program in November and $191.5 billion over the past two months. Add to this the emergency aid for the nation’s imperiled auto industry was thrown into jeopardy Wednesday as some Republicans revolted against a hard-fought deal between Democrats and the Bush White House to speed $14 billion to the ailing carmakers.

Then of course, there’s Bush’s Iraq war, which is costing $10 billion a month on credit.

This entry was posted in Bailout, Bush, Iraq war, U.S. Economy and tagged , , , , . Bookmark the permalink.

10 Responses to Federal Deficit on Pace to Reach $1 Trillion

  1. Conejo1982 says:

    No wonder 80% of people can’t wait for Bush to get the hell out of Dodge.

    He’s ruined the country, the economy, our standing in the world and our confidence and pride.

    We will never pay off a $1 trillion dollar debt.

  2. Kristin says:

    This is crazy, $1 trillion there is not enough tax payer money to buy down this debt.

  3. Fran says:

    I have questions about buying of war on credit (China?)
    • What is that number- additional debt?
    • What are the terms?
    • Why is it not considered to be part of the overall debt?

    The National Debt has continued to increase an average of $3.76 billion per day since September 28, 2007.

    How will we ever dig ourselves out of that???

  4. TOM339 says:

    The Iraq war may draw down based on economics.

    The principle funding source for Bush’s folly is the China Banking Regulatory Commission or CBRC, and as the Chinese economy slows, it will no longer make loans to the U.S. at 8% or purchase U.S. treasury notes.

    The South China Morning Post finally admitted the stories of a slowing Sino economy are in fact, true and with money from Beijing now difficult for the U.S. to obtain, the Pentagon can’t maintain the current spending spree of $10 billion per month on Iraq.

  5. Fran says:

    I did a little digging:
    China’s new status — it now owns nearly $1 out of every $10 in U.S. public debt — means Washington will be increasingly forced to rely on Beijing as it seeks to raise money to cover the cost of a $700 billion bailout. China, in fact, may be the government’s largest creditor, period. The Treasury does not keep records on domestic bond holders. But analysts said China’s holdings are so vast that the existence of a larger stakeholder in the United States now seems unlikely.

  6. Estacada says:

    If the Chinese money pipeline dries up, then what?

    Will the US Treasury just start printing paper money that has about as much worth as Monopoly money?

    This would hasten the destruction of our economy.

  7. Peace Nick says:

    The USA can’t repay this sum of debt.

    The deficit represents 4 times the total amount taken into the treasury in the form of revenue.

    Even if you add in the $280 billion held by foreign nations and owed us, we’re still shy 50% and this would require we suspend entitlement programs like Medicare and Social Security.

    I’m not an economist but it seems to me the only avenue left to us is debt forgiveness. This will require the USA to give up ownership in National Parks, buildings and even Federal agencies.

    Bush has been a catastrophe for our nation.

  8. VicoDANIEL says:

    Bush has been a catastrophe for our nation.

    Yeah, that’s all fine and well, Peace Nick and I agree with you but lets keep it real.

    The Dumbos never told Bush “NO” when he returned repeatedly to the Congress to ask for another $160 billion for his war. No one said, “Wait a minute. Where is this money going to come from?”

    This has gone on now for 5 years. I have to laugh at people who are outraged by the auto industry asking for a paltry $35 billion bridge loan. Where was the outrage about the war spending?

    Crickets.

    vicodaniel1987@yahoo.com

  9. Roger says:

    See, Vico, that money was going to fight the terrorists and keep us safe from all those evil, non-Jesus loving brown people who want to destroy our freedom (to buy a thoroughly impractical vehicle with despicably low gas mileage). And if the Dumbocrats had opposed Bush’s Folly, they would have been cast as “LIBERAL!!” evildoers who are most likely committing sodomy (as we speak!) on Boy Scouts. In other words, they’d’ve been cast as “unpatriotic.”

  10. Randy Arroyo says:

    I can’t even wrap my brain around sums this huge.

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