NationStates Jolt Archive

Government Running $344 Billion Deficit


By JEANNINE AVERSA, Associated Press Writer

WASHINGTON - The government ran a deficit of $344.3 billion in the first eight months of the 2004 budget year, according to the latest snapshot of the nation's balance sheets.



The data released by the Treasury Department on Thursday showed more red ink than the $290.9 billion shortfall for the corresponding period last year.


For the current budget year, which began Oct. 1, spending has totaled $1.53 trillion, 5.5 percent more than the same period a year ago. Revenues came to $1.19 trillion, 2.3 percent more than the previous year.


So far this year, the biggest spending categories are programs from the Health and Human Services Department, including Medicare and Medicaid, $356.7 billion; Social Security, nearly $349 billion; military, $285.2 billion; and interest on the public debt, $190.5 billion.


On the revenue side, individual income tax payments came to nearly $502 billion for the first eight months of the 2004 budget year, 3.1 percent less than the corresponding period a year ago. Corporate income tax payments totaled $96 billion so far this year, a 46.6 percent increase.


The government produced a $374 billion deficit last year, a record in dollar terms.


With a stronger economy expected to help boost overall revenues, some private economists believe the budget shortfall for this year may be about $450 billion. That would surpass last year's record but would still be better than earlier projections.


The Congressional Budget Office recently said this year's budget deficit is expected to be less than the $477 billion shortfall the office projected in March. The White House has forecast a $521 billion deficit for this year and will release updated estimates this summer.


Democrats have pointed to the deficit as evidence that President Bush's economic policies are flawed.


Over the long run, budget deficits will put pressure on long-term interest rates and push up borrowing costs, they say. The Bush administration says the deficits reflect the costs of fighting a war and tax cuts, which it contends were needed to help the economy. The administration wants to cut the deficit in half in five years.


In May, the government recorded a deficit of $62.5 billion, smaller than the $88.9 billion shortfall for the same month last year. The deficit in May was based on revenues of $115.5 billion and spending of $177.9 billion.


http://story.news.yahoo.com/news?tmpl=story&cid=542&e=5&u=/ap/federal_deficit

I read that if you take into account deficits in social wellfare and all that the defecit runs into the trillions. I dont think thats right though. It must be over a really long period.

The fact is this governement doesnt care, because they feel that defecits dont matter. In related news I read some conspiracy theory that they are running a defecit becuse the U.S governemnt wont exist in 30 years. You can always tell a conspiracy theory because its not punctuated.

Clicky (http://memes.org/modules.php?op=modload&name=News&file=article&sid=2666)

But I gotta say, its the best rant I ever read. Its so funny. Especially the Catholic part.

I think the actual deficite is something like 7.something trillion, we've been in debt since the Revolution, but I figure that by now we've paid the French back, after all, we saved their assess in two World Wars and cleaned up their mess in Vietnam...no..wait...nevermind ;D

I think the actual deficite is something like 7.something trillion, we've been in debt since the Revolution, but I figure that by now we've paid the French back, after all, we saved their assess in two World Wars and cleaned up their mess in Vietnam...no..wait...nevermind ;D


That is the debt, the Debt and Deficit are 2 different things.

your point???....we've had a deficit for as long as the country has been established.

your point???....we've had a deficit for as long as the country has been established.


We have had a debt!!! A debt and a deficit are not the same thing. It annoys me when people act like they are the same thing.

Give him a break, he didnt see your post before His came through.

your point???....we've had a deficit for as long as the country has been established.


We have had a debt!!! A debt and a deficit are not the same thing. It annoys me when people act like they are the same thing.
We have had both. As soon as 1860, the government went into a cycle that was in and out of deficit. We were permanently stuck in one in 1980. But hey, it's been twenty years of a nearly uninterrupted deficit, and absolutely nothing has happened. Deficits hardly matter, at least not when they are below 10% of the GDP.

Yeah, but he should still realize that a country's debt load is different from the amount of money they spend and can't account for.

And, FYI, Clinton left office with a surplus, not a deficit. So we have, in fact, not always had both.

Wow, did we reduce the deficit to $344b? I thought it would be worse, like in the 500s. I think it was up there in 02 or something, but of course I could be wrong.

Regardless, it's still a sickeningly massive deficit. And, remind me again, how much did the tax cuts cost? 350 billion?

Yeah, but he should still realize that a country's debt load is different from the amount of money they spend and can't account for.

And, FYI, Clinton left office with a surplus, not a deficit. So we have, in fact, not always had both.
The surplus lasted only a few years, and most of the time, it was comparatively small. The last year, however, the government gained a remarkable $3 trillion.
The deficit, however, has been the centerpeice of government spending. It has never been a bad thing, and as a percentage of the GDP, it's rather low compared with some countries. However, I'd like it if Bush paid more attention to the deficit, and at least reduce it a little. I have a few ways he can do that while furthering his agenda, but that's another topic.

See what I said? Anway, sure the surplus was small, but what do you expect coming out of such a nasty deficit?

Whats concerning is that There is now no money to pay for social security.

you guys should get universal health care. in canada our government spends less per capita on health care and everyone here actually has coverage.

I read that if you take into account deficits in social wellfare and all that the defecit runs into the trillions. I dont think thats right though. It must be over a really long period.

The fact is this governement doesnt care, because they feel that defecits dont matter. In related news I read some conspiracy theory that they are running a defecit becuse the U.S governemnt wont exist in 30 years. You can always tell a conspiracy theory because its not punctuated.

Clicky (http://memes.org/modules.php?op=modload&name=News&file=article&sid=2666)

But I gotta say, its the best rant I ever read. Its so funny. Especially the Catholic part.
Thanks for sharing. It was truly funny. :lol:

[quote=Berkylvania]Yeah, but he should still realize that a country's debt load is different from the amount of money they spend and can't account for.

And, FYI, Clinton left office with a surplus, not a deficit. So we have, in fact, not always had both.

The surplus lasted only a few years, and most of the time, it was comparatively small. The last year, however, the government gained a remarkable $3 trillion.
SAY what? In the last 3.5 years of Bush, the US Debt has grown from $5.7 Trillion to $7.2 Trillion, an INCREASE of $1.5 Trillion

The deficit, however, has been the centerpeice of government spending. It has never been a bad thing, and as a percentage of the GDP, it's rather low compared with some countries. However, I'd like it if Bush paid more attention to the deficit, and at least reduce it a little. I have a few ways he can do that while furthering his agenda, but that's another topic.
Wow, you sure are way off with your financial figures. Bush has just spent more money than any other American President, in only 3.5 years. Thats a record. You need to learn the difference between deficit spending and National Debt.

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Picture thingy.



So, basically, if people disagree with you, you advocate shooting them. Nice.

Picture thingy.



So, basically, if people disagree with you, you advocate shooting them. Nice.
Perhaps it is the inability to add anything worthwhile to the thread?

One thing to remember folks--that $344 Billion deficit does not include the supplemental spending bill that will have to be passed sometime between now and September for spending in Iraq and Afghanistan, and that will add anywhere from $25-75 Billion to the deficit. And it will have to be passed or the military will run out of funds--maybe even before September rolls around.

Big deficits always go hand-in-hand with Conservative governments. They get elected on radical, unsustainable tax cuts which leave government with no revenue - so of course they run up massive deficits.

The biggest joke is that Conservatives always claim that they are the most "fiscally responsible" when in fact the opposite is true. Why do voters keep letting themselves be suckered by them?

Big deficits always go hand-in-hand with Conservative governments. They get elected on radical, unsustainable tax cuts which leave government with no revenue - so of course they run up massive deficits.

The biggest joke is that Conservatives always claim that they are the most "fiscally responsible" when in fact the opposite is true. Why do voters keep letting themselves be suckered by them?

Yeah, and then all these Democrats come out and proclaim that they are "fiscally conservative," to buy some votes from the other side. The sad thing is that it works. I'd support a fiscal liberal/social conservative before a fiscal conservative/social liberal!

[quote=Berkylvania]Yeah, but he should still realize that a country's debt load is different from the amount of money they spend and can't account for.

And, FYI, Clinton left office with a surplus, not a deficit. So we have, in fact, not always had both.

The surplus lasted only a few years, and most of the time, it was comparatively small. The last year, however, the government gained a remarkable $3 trillion.
SAY what? In the last 3.5 years of Bush, the US Debt has grown from $5.7 Trillion to $7.2 Trillion, an INCREASE of $1.5 Trillion

The deficit, however, has been the centerpeice of government spending. It has never been a bad thing, and as a percentage of the GDP, it's rather low compared with some countries. However, I'd like it if Bush paid more attention to the deficit, and at least reduce it a little. I have a few ways he can do that while furthering his agenda, but that's another topic.
Wow, you sure are way off with your financial figures. Bush has just spent more money than any other American President, in only 3.5 years. Thats a record. You need to learn the difference between deficit spending and National Debt.
As a dollar figure, Bush has spent the most. However, when previous expenditures are adjusted for inflation, Bush hasn't spent the most. Far from it, in fact.
The current government deficit is about 4% of the GDP. Not ideal, but it could be far worse. In most of the wars America was in prior to the Spanish-American war, debt was topping 100% of the national GDP. Even in peacetime, early on in this country, the budget wasn't always balanced.
The deficit is also a good thing when one considers it as an investment. There are two programs that are the culprits for the deficit: the military and Social Security. Social Security, as I've previously argued, is useless on the elderly, as it doesn't really help with living expenses, and it is also an economic burden on all of America. However, defense is, more or less, useful. The internet, the computer, the helicopter, the laser, and others, all got their boost as military projects. As more is spent into R&D of the arms industry, it is natural to assume that those technologies will permeate into the civilian market, and thus, help the US and global economies. I'd rather think of these deficits as long term investments, rather than short term grief.
Also, I could care less about government debt. Even if it were at $100 googol, I could care less. It's the deficit we should watch, not debt.

That perception of the debt as unimportant is foolish, Purly, because our largest expense outside Social Security is interest ont he national debt. We spend more on that than we do on national defense, and the only reason we don't spend more than we do right now is because interest rates have been so low thanks to the recent economic downturn. Those will go back up, and we'll have to shell out even more money on this crazy amount of debt that we're under, and considering that the majority of our debt is now currently owned by Saudi Arabia and China, that's a scary amount of leverage for the US to be on the short end of.

I'd support a fiscal liberal/social conservative before a fiscal conservative/social liberal!

But...that doesn't make any sense. How did you come to figure that?

[quote=Berkylvania]Yeah, but he should still realize that a country's debt load is different from the amount of money they spend and can't account for.

And, FYI, Clinton left office with a surplus, not a deficit. So we have, in fact, not always had both.

The surplus lasted only a few years, and most of the time, it was comparatively small. The last year, however, the government gained a remarkable $3 trillion.
SAY what? In the last 3.5 years of Bush, the US Debt has grown from $5.7 Trillion to $7.2 Trillion, an INCREASE of $1.5 Trillion

The deficit, however, has been the centerpeice of government spending. It has never been a bad thing, and as a percentage of the GDP, it's rather low compared with some countries. However, I'd like it if Bush paid more attention to the deficit, and at least reduce it a little. I have a few ways he can do that while furthering his agenda, but that's another topic.
Wow, you sure are way off with your financial figures. Bush has just spent more money than any other American President, in only 3.5 years. Thats a record. You need to learn the difference between deficit spending and National Debt.
As a dollar figure, Bush has spent the most. However, when previous expenditures are adjusted for inflation, Bush hasn't spent the most. Far from it, in fact.
The current government deficit is about 4% of the GDP. Not ideal, but it could be far worse. In most of the wars America was in prior to the Spanish-American war, debt was topping 100% of the national GDP. Even in peacetime, early on in this country, the budget wasn't always balanced.
The deficit is also a good thing when one considers it as an investment. There are two programs that are the culprits for the deficit: the military and Social Security. Social Security, as I've previously argued, is useless on the elderly, as it doesn't really help with living expenses, and it is also an economic burden on all of America. However, defense is, more or less, useful. The internet, the computer, the helicopter, the laser, and others, all got their boost as military projects. As more is spent into R&D of the arms industry, it is natural to assume that those technologies will permeate into the civilian market, and thus, help the US and global economies. I'd rather think of these deficits as long term investments, rather than short term grief.
Also, I could care less about government debt. Even if it were at $100 googol, I could care less. It's the deficit we should watch, not debt.
I suppose you don't care that the debt will be passed onto your children and grandchildren? Of course I am assuming that you have done the patriotic thing and do have children?

BTW, the deficit is out of control. Doesn't say much for the Republicans who are completely in control of all spending?

That perception of the debt as unimportant is foolish, Purly, because our largest expense outside Social Security is interest ont he national debt. We spend more on that than we do on national defense, and the only reason we don't spend more than we do right now is because interest rates have been so low thanks to the recent economic downturn. Those will go back up, and we'll have to shell out even more money on this crazy amount of debt that we're under, and considering that the majority of our debt is now currently owned by Saudi Arabia and China, that's a scary amount of leverage for the US to be on the short end of.
Have you seen this article Incertonia?

http://www.house.gov/genetaylor/floor07-16-03.htm

In just the past 12 months, you have increased the national debt by $544 billion. More importantly, you have stolen $371 billion from the Social Security trust fund. Mr. Speaker, the reason I say stolen is if you take it back and you do not have a plan to repay it, it is stealing. If someone pays on their payroll taxes toward Social Security, they fully expect it to be put in a trust fund just for Social Security and that it is going to be sitting there for when they need it.

That is not the plan, Mr. Speaker. I would encourage you or any of my colleagues to tell me the name of the bank account that the Social Security trust fund is put in. Because you know and I know there is not a dime in it. It is nothing but IOUs, government securities.

You have borrowed $167 billion from Medicare, the same thing. Hard-working Americans pay payroll taxes. On that payroll tax is a line item that goes to Medicare with the promise that it would be set aside just for their retirement. There is not a penny there.

Military retirement, the Federal employees' retirement, we owe the Federal employees' retirement system, Mr. Speaker, over $500 billion.

I hadn't seen it, Canuck, but I'm glad you posted it.

I hadn't seen it, Canuck, but I'm glad you posted it.
Glad to be of assistance. :lol:

I am shocked how little some people here know about what is going on with their hard earned bucks. Purly actually thought there was a $3 Trillion SURPLUS last year.

That perception of the debt as unimportant is foolish, Purly, because our largest expense outside Social Security is interest ont he national debt. We spend more on that than we do on national defense, and the only reason we don't spend more than we do right now is because interest rates have been so low thanks to the recent economic downturn. Those will go back up, and we'll have to shell out even more money on this crazy amount of debt that we're under, and considering that the majority of our debt is now currently owned by Saudi Arabia and China, that's a scary amount of leverage for the US to be on the short end of.
Well, it's extremely easy to get rid of Saudi debt. Find an energy alternative (as I believe is inevitable), and Saudi debt will not matter. Chinese debt is a little more disturbing. However, as I've said, debt at its current level doesn't matter. It doesn't hamper the economy. In fact, it seems to thrive off debt. Debt also doesn't hamper the day-to-day functions of the government. Even if it gets worse, we'll be just like Japan. They've been in a not-so-good position for about a decade, but they're growing the fastest since 1989, and that's under a government debt worth 150% of the GDP. It it got to 1000%, then perhaps I'd worry. But then again, our creditors don't have any real power, economic or otherwise, to force us to pay the debt.
However, I do believe that if it ever got out of hand, the debt could be paid back rapidly. We are the world's most economically powerful nation, and not all of that is from foreign investment.

Two things--our debtors do have a powerful economic weapon to hit us with if we decided to renege on our debt: the dollar's status as the basis of the world economy. Take that underpinning away and combine it with our current balance sheet and suddenly we're Argentina circa 1999. The only thing holding the value of the dollar where it is on the world market is the confidence our debtholders have in us to eventually get our fiscal shit together and pay them back. If they lose confidence, then we're toast.

And your contention that the debt could be paid back quickly is true only if we were to stop paying for everything else and concentrate all our funds on the payment of debt. Think about what that would do to the US economy. No government spending inside the US--depression doesn't even begin to describe the crisis.

Two things--our debtors do have a powerful economic weapon to hit us with if we decided to renege on our debt: the dollar's status as the basis of the world economy. Take that underpinning away and combine it with our current balance sheet and suddenly we're Argentina circa 1999. The only thing holding the value of the dollar where it is on the world market is the confidence our debtholders have in us to eventually get our fiscal shit together and pay them back. If they lose confidence, then we're toast.

And your contention that the debt could be paid back quickly is true only if we were to stop paying for everything else and concentrate all our funds on the payment of debt. Think about what that would do to the US economy. No government spending inside the US--depression doesn't even begin to describe the crisis.
I know it'd be bad. But we can pay it, I'm just saying. In fact, I was hoping you'd realize what would be needed to pay off debt. Our economy thrives in it, as it has been doing in the past twenty years. It's even thrived when we were in the heaviest debt after the Revolutionary war.
As for the dollar being removed as the world's most powerful currency, I fail to see how that'd severly hurt us. Oil is bought in it, but so what? All it means is that we have to pay a few more cents at the pump. So far, Japan and Europe haven't been in any severe oil-induced recessions lately, despite the increased volatility of prices.
I actually think, however, that a nice, valueless, low-profile currency would be good for us. Not to valueless, of course, but low enough so that foreign goods are more expensive, and domestic goods are cheaper abroad. We are self-sufficient in absolutely everything except energy, but there are so many possible alternatives to oil that should take only a few billion dollars and a few years to have the R&D completed. It's off topic, I know, but all in all, the depreciation of the dollar would be a good thing.
Also, you claim that the dollar is so high now because of the good faith by foreign investors. However, if the problem is as dire as you make it sound, why haven't these people been advocating for a weaker dollar? Even today, it seems to fall on deaf ears, as the dollar has somewhat strenghtened against the Euro and the Yen recently.

Two things--our debtors do have a powerful economic weapon to hit us with if we decided to renege on our debt: the dollar's status as the basis of the world economy. Take that underpinning away and combine it with our current balance sheet and suddenly we're Argentina circa 1999. The only thing holding the value of the dollar where it is on the world market is the confidence our debtholders have in us to eventually get our fiscal shit together and pay them back. If they lose confidence, then we're toast.

And your contention that the debt could be paid back quickly is true only if we were to stop paying for everything else and concentrate all our funds on the payment of debt. Think about what that would do to the US economy. No government spending inside the US--depression doesn't even begin to describe the crisis.
I know it'd be bad. But we can pay it, I'm just saying. In fact, I was hoping you'd realize what would be needed to pay off debt. Our economy thrives in it, as it has been doing in the past twenty years. It's even thrived when we were in the heaviest debt after the Revolutionary war.
As for the dollar being removed as the world's most powerful currency, I fail to see how that'd severly hurt us. Oil is bought in it, but so what? All it means is that we have to pay a few more cents at the pump. So far, Japan and Europe haven't been in any severe oil-induced recessions lately, despite the increased volatility of prices.
I actually think, however, that a nice, valueless, low-profile currency would be good for us. Not to valueless, of course, but low enough so that foreign goods are more expensive, and domestic goods are cheaper abroad. We are self-sufficient in absolutely everything except energy, but there are so many possible alternatives to oil that should take only a few billion dollars and a few years to have the R&D completed. It's off topic, I know, but all in all, the depreciation of the dollar would be a good thing.
Also, you claim that the dollar is so high now because of the good faith by foreign investors. However, if the problem is as dire as you make it sound, why haven't these people been advocating for a weaker dollar? Even today, it seems to fall on deaf ears, as the dollar has somewhat strenghtened against the Euro and the Yen recently.

The dollar isn't high right now, but part of the reason for that is that China holds a lot of our debt, and they benefit from a low value dollar--because the yuan is pegged to the dollar, if the dollar rises, then so does the yuan, and so does the cost of Chinese goods on the world market. China benefits because a low dollar means that they can continue to undercut US manufacturers and benefit from the currency imbalance in trade with the EU.

The dollar isn't high right now, but part of the reason for that is that China holds a lot of our debt, and they benefit from a low value dollar--because the yuan is pegged to the dollar, if the dollar rises, then so does the yuan, and so does the cost of Chinese goods on the world market. China benefits because a low dollar means that they can continue to undercut US manufacturers and benefit from the currency imbalance in trade with the EU.
I'm guessing that means you agree with me on most things.
Anyhow, the dollar is not the highest it has ever been, but it isn't all that low, either. In fact, a few currencies have actually fallen against the dollar.
However, I find it sad that China is holding up the US currency. I can see why they want to peg the yuan to the dollar, but they're stealing from US business. I'm not an expert on persuasion, however, and I have no idea how the US could convince China to float the Yuan.
Now, would you be so kind as to answer my other question? I'm sure you would. You're much better debating this issue than CanuckHaven.

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