Uh Oh, Doom n Gloomers

[GenX]

2004: $413 billion
2005: $318 billion
2006: $248 billion
2007: $158 billion

Close readers of this column may recall the top three numbers in the list above from our editorial of July 12, "Incredible Shrinking Deficit." It commented on the mid-session review released by President Bush's Office of Management and Budget, which projected the fourth number, the 2007 federal budget deficit, at $205 billion. Yesterday, the Congressional Budget Office released its own updated estimate for 2007, $158 billion, a deficit even smaller than the White House's July figure. The CBO yesterday also released its latest estimate of the 2007 deficit as a percentage of the Gross Domestic Product, allowing us to update another list of deficit numbers:

2004: 3.6%
2005: 2.6%
2006: 1.9%
2007: 1.2%

The CBO's estimate of the 2007 deficit at 1.2% of GDP is significantly lower than the White House's July estimate of 1.5% of GDP, which we used back in the July 12 editorial, and well below the 40-year average of 2.4%. In other words, the case is stronger than ever that President Bush's tax cuts, rather than creating a budget deficit, are fueling economic growth that is swelling federal revenues and shrinking the deficit.

Incredible Shrinking Deficit, II

[The Piper]

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">the United States borrows close to $3 billion a day — or China’s growing trade surplus of almost $500 million a day?
</div></div> <div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> China helps finance the American deficits by buying treasury bonds with the money it gets from its exports.</div></div>

looky here

[GenX]

I looked.

Old news.

Many people here pointed exclusively at the American deficit as 'proof' economic calamity was just around the corner.

Well...

[Hans]

All is good, lets change the rules and create some federal sponsored unfair market practices.

The Aug. 20 letters from the Fed to Citigroup and Bank of America state that the Fed, which regulates large parts of the U.S. financial system, has agreed to exempt both banks from rules that effectively limit the amount of lending that their federally-insured banks can do with their brokerage affiliates. The exemption, which is temporary, means, for example, that Citigroup's Citibank entity can substantially increase funding to Citigroup Global Markets, its brokerage subsidiary. Citigroup and Bank of America requested the exemptions, according to the letters, to provide liquidity to those holding mortgage loans, mortgage-backed securities, and other securities.


This unusual move by the Fed shows that the largest Wall Street firms are continuing to have problems funding operations during the current market difficulties, according to banking industry skeptics. The Fed's move appears to support the view that even the biggest brokerages have been caught off guard by the credit crunch and don't have financing to deal with the resulting dislocation in the markets.

[GenX]

You're reaching, Hansy, you're reaching...

[Hans]

Reaching?

[1337]

Now if Canada and the US stopped giving income tax refunds to those on welfare, there would be no deficit within 2 years! LOL