Skip to main content

$1.2 trillion deficit EXCLUDING Obama's Stimulus plan?!?!? WOW!

It is remarkable tha the Congressional Budget Office is projecting a federal budget deficit of $1.2 trillion without including Obama's expensive stimulus plan. Assuming Obama's stimulus plan costs $800 billion over two years, you are looking at deficits in the order of $1.6 trillion for the 2009 fiscal year!! Obama tells us that trillion dollar deficits are here to stay, for the coming years.

These numbers are scary!! I like to think of the gravity of a federal budget deficit as a percentage of federal revenue (as opposed to be the GDP as everyone else does). Considering the federal tax revenue is about $2.5 - 2.7 trillion, the deficit for 2009 is going to be anywhere between 44-64% of the federal tax revenue!! Imagine if you are a household spending 44-64% more than you make. How long would you survive? Not for long!! I don't think even the money-printing Uncle Sam can pull this off for too long. This country is on an unsustainable path to a devastating national bankrupcy that would wreck itself and the world as we know it.

Ok, no more doomsday talk. I am hoping all the people (think "experts") who are not alarmed by America's fiscal path have a good reason to be less alarmist. My trust in "the government" and experts has been broken, but I will have to live with them because they are the best we got. There is no certainty in this life.


UPDATE:
I was stunned with these deficit numbers that I went to alarmist mode on the Freakonomics Blog. The question was what predictions would you make about the year 2009? My answer was as follows. Obviously, it is all tongue in cheek, but the concern and pessimism is real.

China stops buying U.S. Treasury bonds, halting Obama’s grand deficit spending plans.

China stops buying U.S. Treasury bonds, leading to increased cost of borrowing for the U.S. government whose 2009 fiscal deficit balloons to $2 trillion as a result.

Many state governments default on their bond payments and file for bankrupcy.

Mexico buys back California, Arizona and New Mexico for pennies on a peso.

No buyers for the states New York and New Jersey, so they go under the custody of the federal government. Krugman claims “capitalization should have been the answer from the beginning.”

States in good fiscal shape acquire dysfunctional ones, leading to a new remapping of the U.S.

Number of states in the U.S. declines by 20% (from 50 to 40) for the first time since the Civil War.

Alaska secedes from the lower 48 and Sarah Palin gets her revenge as she becomes the first president.

Hawaii declares its independence from mainland America citing irreconcilable differences.

Cuba buys Florida and leases it to the Russians.

Comments

Popular posts from this blog

Slow Acroread Startup in OpenSuSe 11.0

It takes more than 30 seconds for acroread to load on my Opensuse machine the first time and the startup time gets shorter in subsequent attempts. Why? This is not the first time I have come across this problem of slow application startups in OpenSuse. Apparently a lot of people had encountered this problem and they found a simple solution - uninstalling the version of acroread that comes with OpenSuse and installing one from Adobe site yourself. Fortunately, that prescription seems to have solved the problem. My acroread startup time is a few seconds now. Why does a very good Linux distribution like OpenSuse with its wide support and following make so many of these mistakes?!?! Over the years, I have seen Suse/OpenSuse sending buggy distributions that make you wonder if they do much testing before releasing their distro. Here are a few bugs I have come across: The extremely slow startup of Openoffice in OpenSuse 10.0 was one of the reasons I switched to Fedora Core for a while...

The Pervasive Mac vs. Windows vs. Linux Analogy

I'm sure everyone has seen the Mac vs. PC ads on TV where the Mac appears to be confident while th PC is in denial about its deficiencies. Missing from that picture is Linux which is robust, but seeks no attention because it has no commercial ambitions. This Mac vs. PC vs. Linux model can serve as a analogy for many things/phenomena. I would like to make a list of those analogies here. For example, The New York Times recently characterized Hillary as a PC and Obama as a mac on the basis of the design of their websites. The analogy would also work if you think of Hillary as the status quo much like Windows, and Obama as the new thing with great promise, cachet and appeal like the newly reborn mac. It is not obvious who would play the role of Linux, but my choice would be Ron Paul. He has some bold and independent ideas along with a very loyal following even though he has no chance of winning. PC Mac Linux Candidate Hillary Clinton Barack Obama Ron Paul States Northeast West Co...

Movies for the Idle Mind

Wondering how I fill my idle hours and days? Among other things, I watch a few movies here and there. Here is a list I downloaded using Bittorrent and am watching at the pace of a movie non-enthusiast. The rating for the movies I have already watched are shown while it is left empty for the others. Woody Allen:: # MOVIE MY RATING ( /10) 1 Annie Hall 10 2 Manhattan 8 3 Hannah and Her Sisters 9 4 Love and Death 8 5 Deconstructing Harry 6 6 Match Point 5 7 Antz 8 8 Play it Again, Sam 8 9 Husbands and Wives 10 The Purple Rose of Cairo 11 Everything You Wanted to Know about Sex, But Were Afraid To Ask OTHER:: # MOVIE MY RATING ( /10) 1 Citizen Kane 7 2 Eternal Sunshine of a Spotless Mind 9 3 The Pursuit of Happyness 6 4 About Schmidt 5 5 The Royal Tenenbaums 10 6 Rushmore 7 7 The Big Lebowski 9 8 Monty Python and the Holy Grail 7 9 Ed Wood 8 10 Broken Flowers 8 11 Basketball Diaries 8 12 Crash 13 The Clockwork Orange 14 City of God 15 The Science of Sleep 16 La Dolce Vita 17...