Wednesday, January 14, 2009

Bad Math Gets Much Worse…

How bad? If the first quarter budget number is annualized, it’s $2 TRILLION bad this year. And that’s with non-GAAP accounting, AND without factoring in any more bailouts from Obama and his HOPE team – how likely is that? As I’ve been saying, the true deficit is going to run into the multi-trillions.

There’s just BAD math all around us. Tax receipts are falling (that would be our nation’s income), while expenditures are going TO THE MOON – Alice!

Cutting taxes and increasing spending is simply more bad math on top of already horrid math.

Reuters
US three-month budget gap exceeds FY 2008 full year

WASHINGTON, Jan 13 (Reuters) - The United States racked up a record $485 billion deficit for the first three months of fiscal 2009, exceeding the $455 billion gap for all of the previous year, the U.S. Treasury said on Tuesday.

In December, the government posted a deficit of $83.62 billion versus a year-ago surplus of $48.26 billion -- a wide swing that the Treasury attributed to a steep drop in corporate tax receipts and outlays from its financial rescue fund.

… The combined October, November and December deficit was nearly five times the year-ago budget hole of $107 billion, according to Treasury data.

The ballooning deficit could constrain President-elect Barack Obama's ability to revive the U.S. economy with a massive fiscal spending program this year. The deficit for fiscal 2009, which started Oct. 1, is expected to hit a staggering $1.186 trillion, according to the non-partisan Congressional Budget Office. This is even before an estimated $800 billion in proposed tax cuts and stimulus spending from Obama.