Thanks for the Party – May I Have a Doggie Bag?

March 13, 2010
By John

The Federal Government set a new record for monthly budget deficits last month.  According to the US Treasury Department on Thursday, the Feds ran up a $221-billion deficit during February, 2010.  That’s just over $700 for every man, woman and child in the United States.  In one month.  Just 28 days.   Yes, that’s $700 added to your credit card bill.  And that doesn’t include interest.

Did anybody ask if it was ok to add this to your tab?   I didn’t think so.

Brother Can You Spare a Dime?

Future of Cheap Money: Wallpaper?

The numbers tell a scary story.  In the third year of the Great Recession, government spending is skyrocketing – going from $280 billion in February 2009 to $329 billion in February 2010.  That’s a $49 billion increase in monthly outlays in just one year.  That’s a 17% increase.  Did your pay go up 17% over the last year?

Meanwhile, revenues increased from $87 billion last year to $108 billion this year.  That’s a nice percentage bump from the bottom point of the recession – but spending nonetheless outgrew revenues by $28 billion in just one month, and in just one year.  Imagine how fun the rest of the 2010 might be?

And what is the government’s proposed solution to this yawning gap between revenues and spending?   A boatload of huge new taxes, spending and regulations:

  • The Bush tax income cuts will expire, and marginal rates across the board will rise as much as 20% (for those who pay taxes) in 2011.
  • The Death Tax will return in 2011, too.  It will increase from 0% in 2010 to 55% in 2011.
  • The ObamaCare Tax increases will kick in – four years before the benefits start.  Anybody think those increases in Medicare taxes, cadillac health plan taxes, tanning salon taxes, medical device taxes, and more won’t be counted as ‘deficit reduction’ before the spending kicks in during 2014?  And with what will we pay those benefits when the fated year of new spending arrives?
  • We’re shutting down oil and gas drilling again.  We’re adding massive environmental, health and workplace regulations.  We’re eliminating union transparency rules, and attacking Wall Street, the insurance industry, the various health industries, auto manufacturers and more.   Yes, we’re befriending our shaken industries.

Will the government get control of spending?  What do you think?

  • They’re going to build 113 new bureaucracies (by last count) to implement ObamaCare.
  • They’re going to take over student loan industry.
  • They’ve got an open line of credit to FNMA and FHLMC to keep housing afloat.
  • They’re expanding unemployment and health care subsidies.
  • They still have $400 billion-plus of wasted stimulus money to burn through.
  • And the Feds are now the major new-hires employer in the country.  There are now over 2-million non-military, non-postal federal employees.  Oh, and according to BLS, the Feds pay 44% more than private sector employers for the same work.
  • And let’s not forget they are trying to figure out how to use the returned TARP monies to ‘invest’ in other industries – in what the President calls ‘partnerships’.

Is Truth Riding the Rails Again?

In the 1930’s, folks were broke.  Even people with good jobs struggled.  The country was illiquid, and we had widespread un/underemployment and considerable fear about the future – much of it caused by ill-considered government policies that bear a striking resemblance to those being pursued today.  And in those dark days, the hobo became a romanticized figure – the solitary, untethered poet laureate of a generation.  And his theme song was “Brother, Can You Spare a Dime?”

Welcome back, Brother.

Are We Broke?

That’s the question of the day, isn’t it?  With all this debt – and no one is quite sure how much debt there really is (but you will soon see it is much bigger than you have been told) – can the wealthiest nation in history also be broke?  And if so, does that mean America is finished?  What does that mean for our families and our homes?  Is there anything we can we do about it?

Over the next two weeks, Rough Truths will publish a series of columns about the real numbers underlying America’s staggering debts and remarkable assets, about the real state of the economy and our massively over-leveraged nation, and about what we can do to right the American ship in the middle of this self-induced storm.

There is much reason to believe we can recover from this mess (and we can), but there is no easy path to salvation.  When you look at the real numbers – it is obvious what we must do.  The problem is that we – the grown-ups of America – must break promises we made to ourselves over the last five decades to fix it, and face down our own feckless disregard for the future we are foisting upon our children.

The Party is over.  It is time to pay the bar tab and go back to work.

Reference Articles:

http://online.wsj.com/article/SB10001424052748703701004575113871329724374.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsThird

http://finance.yahoo.com/news/Budget-deficit-sets-record-in-apf-1335677142.html?x=0

http://www.bloomberg.com/apps/news?pid=20601110&sid=aGiQzUhSOlfA

Tags: , , , , , , ,

2 Responses to “ Thanks for the Party – May I Have a Doggie Bag? ”

  1. JoJoTo4 on March 15, 2010 at 9:56 am

    It seems to me that our boys and girls in Washington have been dealing with only numbers for far too long. Wake up, we are not numbers we are people, they throw (our) money around like it’s nothing. They need to put a face to this cash wind fall! They treat it like a monopoly game, it really seems to me that their just playing a game, tag your it, No you didn’t touch me , yes I did, no you didn’t, just stop! They are so out of touch with the people who put them there! Fix what’s broken and just do the right thing. Stop helping themselves for personal gain; after all, they work for us? Just makes you go hmmmmm! Thanks for allowing me to vent a little JM you are doing a great job, keep it up!

  2. momof3 on March 16, 2010 at 11:38 am

    OK. We have all known for a VERY long time that the US Government is not run like any other business (for profit or not). They cannot balance a budget and when they need income they either just print more or raise taxes. The GAO (Government Accounting Office) does not apply standard accounting principles and an audited set of Financial Statements as required for ANY publically traded company would make Enron look like Sesame Street!

    If the public or even just the business leaders started asking for numbers we could understand, I think we would ALL be shocked.

    What happens when spending exceeds income? Eventually the business goes out of business… Hmmmm… Are we talking BK for the US? How does that work? What court do they file in? Or do they? Who has to sign as the “Responsible Party?”

    Sorry, just some random thoughts from someone who is disgusted with the lack of fiduciary care in the United States governemnt.

Leave a Reply

Get Adobe Flash playerPlugin by wpburn.com wordpress themes
ga.js