Feb 27 2009
U.S. 2009 Budget Deficit Proposal – $1.75 Trillion
President Obama yesterday put forward his 2009 Budget Proposal. If implemented without change it forecasts a 2009 Budget Deficit of $1.75 trillion. His budget calls for a spending plan of $3.55 trillion that would boost taxes on the wealthy, curtail Medicare, and “make way” for a $654 billion down payment on universal health care. The budget inherently must assume U.S. Government revenues of $1.8 trillion for 2009.
My Comments: My review of public data on U.S. Revenues for 2007 and 2008 suggest they were $2.63 trillion and $2.66 trillion respectively (which seems too low). If these numbers are the correct ones to compare with what I think must be the assumed U.S. Revenue forecast for 2009 of $1.8 trillion, that suggests the U.S. Administration is forecasting an approximate 1/3 reduction of revenues in 2009 from 2008. Given the current economic circumstance it makes sense to me that U.S. Government revenues will be down in 2009 significantly. I have been unable to find other commentary on ‘by how much’, and I may in my analysis have picked up incorrect numbers. You can review the data source I used for 2007/2008 U.S. Government Revenues by clicking here. I will be reviewing this and commenting on further posts as I find more data. In any event, no business or household could survive for long by spending twice what it makes, particularly when it has prior accumulated debt equal to approximately 6X its current year expected income (calculated as assumed cumulative U.S. National Debt of $11.5 trillion/$1.8 trillion apparent 2009 forecasted revenue). I continue to wonder whether I am simply getting this all wrong and not assessing things sensibly – or if I am assessing things correctly (or even ‘reasonably’ correctly) how the end game is not a continuing U.S. economic deterioration.
Read an article summarizing yesterday’s budget announcement by clicking here. You can also play a video purporting to ‘grade’ President Obama’s Budget Proposal that accompanies the article.
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This is a great deal of money right here. I voted for Obama, but a little scared of the impact of spending that much money. On the lighter side, at least this money is going back to the people and not across to the Middle East to “spread freedom” as was said under the Bush Administration.
Hi
Really a very tough time for Presidents of USA ,The whole world is facing the same problem,
People loose his her jobs,
See what happen in coming days ,
Thanks
Do you think the stimulus and the housing plan will work? I wonder. The deficit is going up and inflation may be just around the corner. I saw a good article on this on
http://www.recessioninfocenter.com
Jeff:
Thanks for your comment. In answer to your question I am highly doubtful the stimulus and housing plan will work as well as the U.S. Administration hopes it will. My reasons are first that these plans will be government administered and hence (I believe) administered in a well-intentioned but inefficient way, and second that the time it will take to put them in place needs to be immediate and it won’t happen quickly enough given the current almost daily U.S. economic ‘bad news’.
Ian