The Congressional Budget Office announced last week that the federal deficit for 2009 would be $1.2 trillion--as a share of the economy, the largest since World War II. And that's not even including the proposed stimulus package. Responding to that staggering sum, President-elect Barack Obama warned that without decisive action, "trillion-dollar deficits will be a reality for years to come."
But just how much is $1.2 trillion?
To put this year's deficit in perspective, we thought of a few unrealities that carry a similar price tag:
Noble causes, all, but one in particular stands out: compensation for all of Bernard Madoff's defrauded investors with a 2000 percent rate of return.
The authors are Research Analysts of the Peter G. Peterson Foundation.
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The market for cars was 18 million at its peak and they say the market now is about 12 million vehicles. Suppose that putting a battery in a hybrid adds 5,000 dollars to the cost of the car.
That means you could subsidize 1 million hybrids with 5 billionn dollars
You could subsidize 10 million hybrids with 50 billion dollars.
You could subsidize 12 million hybrids, the entire annual production of cars in the usa every year, for 5 years, for 300 billion dollars.
It is unlikely that it will cost 5000 dollars to add a battery to a gas vehicle to make a hybrid when they are mass produced in large quantities. The cost will probably be halved. What's more, when the mileage goes up and oil imports slow to a trickle, the dollar will get very strong making foreign goods cheaper and your paycheck worth a lot more in purchasing power.
Just remember what ol' fresh tolya when you hear all the whining and crying coming from the right in the next few months and everybody stands around scratching a hole in their head wondering how they can afford these big bailouts.
What we have seen in the first three months of the fiscal year is Bush's structural deficit of about 50 billion per month (about the average of the last 6 years), falling tax revenues and bailout spending. This yielded a total of 500 billion for the first quarter. Going forward the 1.2 trillion dollar number is meaningless. Realistically that number should be about 1.8 trillion plus at least another trillion for the stimulus and continuing bailouts. So this year's deficit could be about 3 trillion in total.
Oh, I forgot to mention the costs of the potential liabilities taken on by Bush, Paulson and Bernanke in their loan guarantees and other commitments of 8 trillion. If all those "troubled assets" turn out to be worth what Lehman's similar assets sold for (8 cents on the dollar) the deficit will be closer to 10 trillion. Enjoy!
credit comes from savings, not more credit.
http://www.youtube.com/watch?v=2XkabcSkpOA&eurl=http://www.dailypaul.com/
I believe it was around 1977 that the TOTAL national debt was at $1.2 TRILLION.
For more than the first 200 years of this nation's existence, for every bridge built or mile of highway or building, including many very expensive wars, we did not run up $1.2 TRILLION in national debt.
We talk about $1.2 TRILLION for 2009, but it was just about that level in 2008, and it looks like 2009 might actually be TWICE AS HIGH, over $2 TRILLION.
While some may claim a perspective that makes that $2 TRILLION deficit acceptable, I see it as the culmination of our irrational and unsustainable debt-money system.
The money-managers want us to get out of this death spiral of debt by adding even more debt, even faster.
So my suggestion is that we do away with the deficit.
We do not ADD to the debt-death-spiral.
Rather, we have the Treasury issue payment in United States Notes for the funding that is needed to make the changes to a more sustainable economy, including a sustainable money system.
Congressman Dennis Kucinich is leading the political push for monetary reform, and he has well laid out the rationale for these reforms in his remarks in Congress on the Bailout Bill and the financial mess.
http://www.youtube.com/watch?v=AR2EtMteHCg&feature=channel_page00
http://www.rollingstone.com/politics/story/25456948/what_obama_must_do/print
But I do believe China is in to us for more than 1.2 tril... somebody square me away on that. Iraq alone is more than a quarter of that at 10 bil a month. They have so many T-bills they don't want any more.
Obama's plan calls for big spending increases to get the economy out of the recession that Bush left us with, and then afterward to once again raise the top marginal rate for people earning more than $250,000 from 36 percent to 39 percent as it was under Clinton.
if the government was treated as a corporation, there would be another side to the equation:
the asset side. here is the total value of the asset, less the total value of the liability, that would
equal the net profit or loss. just fixating on the deficit or the debt does not show the whole picture
nor the truth to the american taxpayer.
of course what value do you place on the grand canyon, the red wood forest, the grand tetons,
the military academies, the military bases and planes, humvees, etc. see where i am going here?
yes the debt is a boogie man, and the deficit everyone's nitemare, but if put in the proper perspective
of the total worth of our country it doesn't seem out of porportion......maybe SOX should be applied to
the government..................
To something.
Depending on our perspectives.
It's probably just my warped perspective on bookkeeping, but I wouldn't see the deficit relating to the government's balance sheet at all.
I see it more of an operating statement thing.
So, rather than assets minus liabilities, which are always supposed to balance, by the way, it's more about revenues minus expenses, which next year are going to run about $2 TRILLION to the negative.
And, that $2 TRILLION is what would get added to the liability side of the government's balance sheet, with a concurrent offsetting amount on the asset side as being due from the taxpayers. At some point in time.
That may sound OK, from your perspective.
I think the amount in that operating budget for payment of INTEREST on our national debt is about $750 BILLION DOLLARS. It could be less, or more.
I am not sure how to compares that to the Grand Canyon.
I would compare it to what it could buy in terms of health care and education and infrastructure and jobs for Americans.
Our debt money system is preventing the people from achieving the goals of a clean environment, a healthy people and a sustainable economy.
So, yeah, from my perspective, that does sound kind of scary.
A = L + E
Every single critic of the stimulus package kept their mouths shut for those 8 years.
Those critics are now trying to prevent Obama from getting less than one sixth as much to try and fix ALL of Bush's mistakes.
I don't recall reading a post like this even, except in regards to the war spending alone.
Please don't try and tell me that Bush could be trusted to spend our money but a Democrat can't be.