October U.S. Deficit: $237.2B

WASHINGTON — The federal government began the new budget year with a record deficit of $237.2 billion, reflecting the billions of dollars the government has started to pay out to rescue the financial system.

The Treasury Department said Thursday that the deficit for the first month in the new budget year was the highest monthly imbalance on record. It was far bigger than analysts expected, over four times larger than the October 2007 deficit of $56.8 billion, and more than half the total for all of last year.

The big surge reflected the government spending $115 billion to buy stock in the nation's largest banks. Those were the first payments made from the $700 billion government rescue program passed by Congress to deal with the most severe financial crisis to hit the country since the 1930s.

The October deficit began a period in which economists are forecasting the red ink for the entire year could well hit $1 trillion, reflecting what many expect to be a severe recession, which will depress tax revenue, and the heavy costs of the financial system bailout.

President-elect Barack Obama has said that getting the economy back on track will be his top priority and has promised to work with Congress to pass a second stimulus program.

The $237.2 billion deficit for October included total government spending of $402 billion, a record in terms of outlays.

The spending figure included $115 billion paid to some of the country's largest banks to buy stock, the beginning of a program in which the government will spend $250 billion before the end of the year to take ownership shares in hundreds and potentially thousands of banks. The goal is to bolster banks' balance sheets so that they will resume more normal lending and keep the country from falling into a prolonged recession.

The deficit also was boosted by the government's move to purchase $21.5 billion in mortgage-backed securities, an effort the Bush administration announced when it took control of mortgage giants Fannie Mae and Freddie Mac in September because of rising losses in that market.

Government receipts in October totaled $164.8 billion, down 7.5 percent from October 2007, reflecting the impact on revenues from the slumping economy.

For the 2008 budget year, which ended on Sept. 30, the deficit totaled a record $454.8 billion, reflecting the impact of the weak economy on revenues and a $168 billion stimulus program which sent stimulus payments to millions of Americans during the spring and early summer.

The Bush administration in July estimated that the deficit for the current budget year could hit $482 billion, but that projection was made before the administration got Congress to pass a $700 billion rescue program on Oct. 3.

Comments

[littleblackcat]

We can begin getting back on track by rescinding the obscene tax breaks given to the rich buddies of the republican party.
Windfall profit taxes on the oil companies retroactive to 2004.
Bonuses, stock options, ridiculous paychecks seized, assets frozen for executives of oil companies.
Assets stripped from anyone in the financial industry who participated in the crazy schemes to lend money to people who had absolutely NO WAY to pay their mortgages once the rates adjusted without borrowing ever more on the "equity" (that has disappeared, along with the value of the homes purchased). These schemes did not come from the foolish people, it is everyone's dream to own a home. It takes a certain level of responsibility to be able to afford one, and if you don't have the education to know that, you are vulnerable to persuasions of those who stand to earn fat commisions by selling you a mortgage you can't afford.
Make any mention of "trickle-down" economics punishable by mandatory labor at minimum wage for six months.
After that six months, make a televised speech on what you learned about life in the real world.

[PT6]

The only way to make PROGRESS is TO PUSH THE BUSH GANG ASIDE!

End the BUSH GANG"s RULE NOW or we will NEVER be able to Recover!

THE BUSH GANG is USING this CRISIS to FEED the Corrupt Banks so they can BUILD FINANCIAL EMPIRES with NOT simply SUPER BANKS but MEGA BANKS!

We must insist the BUSH GANG STEP ASIDE and let a new Team Take Control to save America and the World!

We are headed toward more control by the RICHEST people in the World!

The BUSH GANG is creating the "CORPORATE RULERS of the WORLD!"

ALSO: When is Bernake going to give a FED report on who received the $2 to $3 Trillion he has allocated? Does he answer to America or does he run a separate country?

Can we trust the FED anymore to have America's and the world's success as its goal?

65 Days is too long to let us all be DRIVEN INTO A DEEPER HOLE!

[NOLIESPLEASE]

If our debt is 53 Trillion dollars, we are BANKRUPT as a nation. If that is that actual the market crash (second and final crash) is around the corner.

IF in fact we are this deep in debt ....kiss the Federal Reserve good bye ....THANK GOD

To understand this better please watch www.zeitgeistmovie.com and click on Zeitgeist Addendem. This two hour documentory will change the way you look at the banking system and how we must change it. OUR VOICES WILL NOT STAY SILENT !!!

Pass this info on ....everybody should view this before this country is bankrupt.

[jmundstuk]

Poor Benjamin.

[OkieMon]

110% bush/cheney/neocon/republican fault.....destabilized oil markets with their hoarding of crude and then further destabilized oil markets with their illegal invasion of the mideast.....then refused to control oil speculation as oil soared to 150 dollars a barrel....

[Ramirez]

And then they refused to control oil speculation as oil sank to 60 dollars a barrel!

[olephart]

In the interim, it cost American consumers 300 billion dollars in increased gasoline prices but hey, who's counting. The commodity markets are a casinos, it's the Government's responsibility to make sure no one deals off the bottom.

[Viper]

In the interim that took the auto makers down, the airline industry and cost about 2 million jobs and help lead to the finanical crisis.. which did suck the cash out of the speculators such as Goldman which held more oil futures than any one actually using oil and kept shouting it was going to $200 per barrel.

It transferred huge wealth from the many to the few.

And even now its going to be held up by some by oil cartels.. are they part of a free market?

Regards

[white mende man]

Yes Sir, George W. Bush is breaking records left and right... bet we see him in the next issue of the Guiness Book of World Records.

[Rule Of Law]

If I borrow money to buy a house or a car or a washing machine, it is considered debt by MY banker! If Bush is borrowing money from the FED--and even though it is the treasury that mints and prints it, we DO borrow it at interest--then that's a deb, plain and simple. There may be assets behind it, but a loan is a loan is a loan.

[DuganS1]

The interest on the debt is extremely low and inflation could easily erode a lot of it, giving us negative borrowing costs. Second, 75% of the debt we owe to ourselves, as Americans buy most the treasuries.

[killpack]

We all need to write our Congressmen IMMEDIATELY! Seriously.

[VikingQuest]

Why?

They are the ones spending all the money, they are the ones that passed the budgets.

[white mende man]

hmmmm bet he never thought of that ;-)

[Eyckie]

These guys are not accountable for the debt they have created and they need their feet held to the fire. They shouldn't be using taxpayers money for this ridiculous bailout. Let the big 3 go down instead of throwing good money after bad. At least make them produce a plan to show how they are going to get back on track. I don't think they should be bailing anyone out, least of all the auto industry. After all of the billions American's have sunk into a failing industry they laid off tens of thousands of workers. DON'T GIVE THEM ANYMORE MONEY.

[Eyckie]

I want to see the audit report from the Bush admnistration when it is published in December. I read this morning that the actually deficit is more like 53 trillion dollars, not 10 trillion. The media has helped to keep this from Americans in the dark about the read debt in Washington and Bush/Cheney need to go to jail for the crimes they have committed against the American people.

[Ramirez]

You are confusing deficit with debt.

[JoeBlough]

We need to add up all of the "off budget" items the government spends money on. The situation is much worst.

[DuganS1]

All of this money shouldn't be considered debt because the govt used a lot of it to purchase assets that have value and will almost certainly appreciate over time. This could really pay off for the government in five or so years.

[killpack]

I hope you aren't referring to the government's "investment" in AIG.

[WIpatriot]

And the value of those assests is....?

[DuganS1]

The value of some of these equity stakes will become quite substantial, especially those in JP Morgan, Wells Fargo, and the smaller regional banks.

[olephart]

"the govt used a lot of it to purchase assets that have value and will almost certainly appreciate over time."

Yeah that's right and you know if we sent them more tax money they could buy more assets and then we'd all get filthy rich. So let's raise taxes because it"s a really good investment opportunity. You go first.

[munki]

Paulson does not seem to have the right temperament to do the job...
c'om... you are using our money...

[Chaucea]

A new record??

They must be so proud!

They certainly did their best to make it happen! :-P

[olephart]

Once again the parrots are regurgitating the pabulum from the Government. The net borrowing for the month of October was over 500 billion. The reported number does not include the Social Security surplus, which was borrowed and spent, or the "off balance sheet" borrowing. This is how the National Debt can rise one trillion dollars in fiscal 2008 while the "deficit" was only 450 billion. Smoke and Mirrors.

[DuganS1]

Social security shouldn't be included in that number because retirement dates can be changed, the payroll tax structure can be changed, benefits can be reduced, etc. etc.

[WIpatriot]

What?

[olephart]

And if elephants could fly they could nest in trees etc. etc..