Feb 26 2009
The Treasury is Going to be Very Busy
I’m looking over the Obama budget stuff that was released in the last hour. Get this. The federal budget deficit projections for the next 6 years are
- 2009 $1.75 trillion
- 2010 $1.17 tln
- 2011 $912 bln
- 2012-2015 each under $600 bln
Add this all up and you get a cummulative budget deficit for the next six years of around $6 trillion. That means $6 trillion in new debt.
Ummmmm….Where’s the fiscal responsibility?
Getting the budget deficit down to $600 bln by 2012 sounds great in a speech - Yeah! We cut the deficit in half! - until you understand what it really means. The stimulus package will have worked it way out of the budget (at least mostly) by 2012, but we”re still going to have a deficit of $600 bln? Where’s all this cost savings Obama’s talking about? If he were really cutting out the fat, I should think he’s be able to get the deficit down further.
The bottom line is that baring a major upturn in the economy to massively improve tax receipts, it looks like Obama is just going to leave the country in much worse debt shape than it already is.
This, by the way, is a big part of why I like the short Treasury trade.
Here are some other posts which might interest you:
