Increasing federal deficit

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Anybody worried yet?

Quote:

Federal budget deficit for November hits $120.3B
By MARTIN CRUTSINGER, AP Economics Writer Martin Crutsinger, Ap Economics Writer 40 mins ago

WASHINGTON " The federal deficit for the first two months of the new budget year is piling up faster than last year's record imbalance.

Economists worry the flood of red ink could push interest rates higher and raise the cost of borrowing for consumers and businesses, a potential drag on the fragile economic recovery.

The November deficit totaled $120.3 billion, the Treasury Department said Thursday. That's less than analysts had expected and down from a $176.4 billion imbalance in October. It was a record 14th straight monthly deficit.

Even with the improvement, the deficit is 5.7 percent higher than the first two months of the 2009 budget year when it hit a record $1.42 trillion. The Obama administration expects the 2010 deficit will set a new record at $1.5 trillion.

And he promised to reduce the national debt or increase it?

Quote:

Obama Says We Must Reduce Debt

"The government is going to have to get serious about reducing our debt levels," President Barack Obama told his Economy Recovery Advisory Board Monday. This was the board's second meeting with the president; it was established to provide the White House with an independent voice on the economy. While saying that the government's focus must also be on job growth, Obama said that the private sector must lead the way. The president indicated that unemployment figures will get worse before they get better. “We anticipate that we are going to see some job losses in the weeks and months to come,” Obama said.
Read it at Bloomberg News
Posted at 6:51 AM, Nov 3, 2009

Most estimates show that Obama will double the national debt.

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Type: Discussion • Score: 2 • Views: 5,823 • Replies: 70

[+4] - Thomas - 12/10/2009[quote="cicerone imposter"]I'm just wondering who's going to be paying these higher costs?[/quote] The same 55-65 year olds who are now paying for private plans. That's not a secret, is it?

@cicerone imposter,

I thought we knew this back when the TARP stuff was happening.

Has something new happened, or is this just more hand wringing over past decisions?

By the way, the National Debt was predicted to skyrocket over the next 20 years just due to Medicare costs. These are old problems that have been brewing for decades, coming home to roost, aren't they?

2 Replies

@rosborne979,

Many have already paid the rooster, and it's getting worse for more American families as our government continues to help wall street at taxpayer expense. These finance companies are back to paying million dollar bonus to their employees (who produce no consumer goods or service) while the government just sits on their hands and congratulate themselves that the financial crisis is over. The UK is in the process of taxing bonus at 50%; a good idea that should be imported to our country. Why should bankers get richer while the rest of America suffers, and the deficit grows to impact the future economy of our country? The US should implement a 75% tax on bonus; that will make them think twice before they think about enriching themselves at the expense to the rest of us.

0 Replies

@cicerone imposter,

cicerone wrote:

Anybody worried yet?

Certainly not the bond market -- yields on long-term US government bonds remain as low as ever. If the current deficit spending leads to terrible interest rate hikes, the economists who worry about it don't seem to be putting their money where their mouths are.

2 Replies

@Thomas,

An excellent point, Mr. Thomas. A point which is reiterated almost daily in the pages of the Wall Street Journal.

0 Replies

@rosborne979,

According to Cyclo, he believes Medicare costs will drop while our government adds 30-million more beneficiaries to the UHC program. Congress is now considering letting 55 to 64 year olds participate in Medicare, but I'm not sure how cost will be affected by this move since we still don't know what their premiums will be. It's estimated that each Medicare beneficiary costs the government $8,000/year.

With the increase in retirees (from the baby-boomers), and the reduction of workers paying into social security and Medicare, I'm just wondering who's going to be paying these higher costs? The government's printing presses are already working 24/7 - producing monopoly money.

2 Replies

@cicerone imposter,

cicerone imposter wrote:

I'm just wondering who's going to be paying these higher costs?

The same 55-65 year olds who are now paying for private plans. That's not a secret, is it?

2 Replies

@Thomas,

And, what will then happen to the private plans? They will disappear. Some have pointed out that the current plan for the extension of Medicare is not only prohibitively expensive( wait till the CBO scores it) but it is also a Trojan Horse which may eventually give the left wing their victory.

But the plan has not passed yet. There are several key Democratic Senators who say they will wait for the CBO scoring. Polls throughout the USA currently show that the majority of the American people want health care left essentially as it is now.

3 Replies

@MASSAGAT,

Private plans will not disappear; Medicare will go bankrupt by (gov't estimate) 2017.

2 Replies

@Thomas,

Thomas wrote:

cicerone imposter wrote:
I'm just wondering who's going to be paying these higher costs?

The same 55-65 year olds who are now paying for private plans. That's not a secret, is it?

Apparently it is, as this same question has been asked and answered about 20 times in the last two weeks.

Cycloptichorn

1 Reply

@Cycloptichorn,

http://www.healthpointpa.com/archives/medicare-trustees-say-the-fund-is-on-its-way-to-bankruptcy-by-2017/

1 Reply

@cicerone imposter,

cicerone imposter wrote:

http://www.healthpointpa.com/archives/medicare-trustees-say-the-fund-is-on-its-way-to-bankruptcy-by-2017/

Yes - when we enter a recession, the programs funded by our tax dollars go into crisis mode just like any other government program. I don't see what is surprising about this at all.

Cycloptichorn

1 Reply

@cicerone imposter,

c.i. wrote :

Quote:

Private plans will not disappear; Medicare will go bankrupt by (gov't estimate) 2017.

most people , politicians , governments think ahead a day - a year at most imo .
not many are concerned about 2017 . it SEEMS a loooong way off , doesn't it ?

0 Replies

@cicerone imposter,

cicerone imposter wrote:

Private plans will not disappear; Medicare will go bankrupt by (gov't estimate) 2017.

That's not quite correct - short-term insolvency (by government accounting rules) is 2012, and actuarially - under current accounting standards - if Medicare were a private company it would have had to file for bankruptcy 3 years ago:

Quote:

For the third consecutive year, a "Medicare funding warning" is being triggered, signaling that non-dedicated sources of revenues"primarily general revenues"will soon account for more than 45 percent of Medicare's outlays. ..[...]The fund again fails our test of short-range financial adequacy, as projected annual assets drop below projected annual expenditures within 10 years"by 2012. The fund also continues to fail our long range test of close actuarial balance by a wide margin. The projected date of HI Trust Fund exhaustion is 2017, two years earlier than in last year's report..

http://www.ssa.gov/OACT/TRSUM/index.html

2 Replies

@High Seas,

High Seas, Even your article shows:

Quote:

The projected date of HI Trust Fund exhaustion is 2017, two years earlier than in last year's report..

1 Reply

@High Seas,

P.S. The above is from the 2009 trustees' report for Medicare. The true Medicare actuarial deficit (by standard actuarial calculations) was as of last year $36.3 TRILLION, and that's before this latest health insurance boondoggle passes >
http://www.pgpf.org/about/nationaldebt/
> and for the U.S. as a whole the actuarial deficit for 2009 is $60 TRILLION.

0 Replies

@Cycloptichorn,

Cyclo, You react to this crisis like the government; they ignore all these warning signs, and continue to add more benefits as they produce more currency at the printing presses. This is not new because of this recession; they have refused to address this problem even in good times.

0 Replies

@cicerone imposter,

Read carefully - one is the short term cash exhaustion, due in 2012, the other is the trust's exhaustion, in 2017. Not the same thing.

1 Reply

@High Seas,

Well, what I said earlier was

Quote:

Medicare will go bankrupt by (gov't estimate) 2017.

If the HI trust fund is "exhausted" by 2017, it means the same thing as "bankrupt" in my understanding of the English language.

1 Reply

@cicerone imposter,

Possibly it means the same in plain English, that's WHY each time you have to specify carefully it's the ACTUARIAL calculation.

1 Reply

Increasing federal deficit

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