Last week, a bit of news came out that—weirdly—didn’t garner the attention or the reaction one would have thought it would:
The U.S. Federal government deficit for fiscal year 2011 was revised to $1.645 trillion. That revision was up from the previous estimate of $1.4 trillion, which itself was a revision just a couple-three weeks ago by the Congressional Budget Office from the White House’s earlier projection of $1.267 trillion in December.
The additional $378 billion in deficit spending comes from loss of tax revenue: Both from the fall in tax receipts due to the ongoing depression we’re experiencing, as well as from the idiotic budget deal with the Republicans, whereby the Bush-era tax cuts were extended.
These deficit numbers are huge. Huge. HUGE.
As for the total debt, as of January 2011, the U.S. Treasury had $8.965 trillion in outstanding securities, plus an additional $5.166 trillion in “non-marketable” securities—that is, intra-government debts. The total outstanding debt of the U.S. Federal government is $14.131 trillion.
The U.S.’s gross domestic product in 2009 was $14.29 trillion.
So this current deficit is over 11.5% of 2009 GDP. Even if we take Office of Management and Budget (OMB) rosy predictions for 2010’s GDP, the deficit is still 10.9% of GDP.
As to the rolling debt? It’s just about 100% of GDP.
These are Third World numbers: Deficits that are in the double-digits vis à vis the gross domestic product—and total debts that equal tha GDP—are numbers that Argentina—Greece—Zambia gets:
These numbers aren’t supposed to happen to the good ol’ U.S. of A.!
Oh, but they are happening. (my emphasis)
Read the rest of Gonzalo’s informative article.
By Gonzalo Lira
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