New US Milestone: $1 Trillion in the Hole
 

Barack Obama, the worst president in the history of the United States, has now managed to drag our country into a new lowpoint: The national deficit has finally reached a whopping $1 TRILLION.

So what is the commander-in-thief thinking of doing about this enormous debt that he's forced the country into? Borrowing more money, of course. Just like a person who can't keep up with credit debt would borrow even more money to make the interest payments on the credit cards. Apparently, spending less is not something that Leftists like Obama ever contemplate. On the contrary, he's busy forcing the disastrous trillion-dollar health care scheme down the throats of American businesses which are already falling like flies.

We're also now seeing the results of the Leftist "stimulus" plan, which only stimulated the pocketbooks of Obama's political donors. All the "shovel-ready" jobs Obama promised turned out to be just welfare checks to his voters, not real jobs. And, every time Obama announces new plans to steal even more tax money from small businesses, the unemployment rate jumps.

I should also mention yet another national milestone which deserves it own thread: Under the Obama administration, we've now surpassed the tipping point in that less than 50% of Americans pay tax. The rest don't.

From news article:
The deficit has been propelled by the huge sum the government has spent to combat the recession and financial crisis, combined with a sharp decline in tax revenues. Paying for wars in Iraq and Afghanistan also is a major factor.

The country's soaring deficits are making Chinese and other foreign buyers of U.S. debt nervous, which could make them reluctant lenders down the road. It could force the Treasury Department to pay higher interest rates to make U.S. debt attractive longer-term.

"These are mind boggling numbers," said Sung Won Sohn, an economist at the Smith School of Business at California State University. "Our foreign investors from China and elsewhere are starting to have concerns about not only the value of the dollar but how safe their investments will be in the long run."

Government spending is on the rise to address the worst financial crisis since the Great Depression and an unemployment rate that has climbed to 9.5 percent.

Congress already approved a $700 billion financial bailout and a $787 billion economic stimulus package to try and jump-start a recovery, and there is growing talk among some Obama administration officials that a second round of stimulus may be necessary.

http://www.foxnews.com/politics/2009...trillion-time/

Actually the stimulus plan is supposed to show most of its effects in 2010.

Wish it were so. But even the Obama team admits it's been a failure, which is why they're talking about the need for another stimulus plan in the next few months.

Yes and no. They want another stimulus because the economy is doing worse than what they thought. You could of course blame them for not getting things right in the first place, but now that everyone is admitting that the economy is doing worse and that the stimulus is insufficient, the obvious thing to do now would be to spend more/lower taxes to reactivate the economy.

There goes mi dinero.

Scattergood,

Right on. Obama blew an enormous amount of taxpayer money on his failed economic strategy, and now he's looking to raise taxes even further on hard-working Americans.

I really can't believe that no one is holding Obama accountable for what he's done. How can there be no congressional hearings and no special prosecutor appointed to look at Obama's mismanagement of our national wealth? Pure corruption.

I don't think that Obama underestimated the problems in the economy. I believe that he simply lied to congress and to the American people about the shovel-ready jobs and about what the money will really be used for. he promised to create jobs, but instead funnelled the money to his voters as a political payoff.

Indeed, there's also a posibility that maybe they will get things wrong again. But right now the bigget risk is to fall in deflation rather than stimulating the economy too much (read: inflation), IMO.

But in a way or another, the tax burden will have to increase for paying for Social Security claims (in let's say 2020).

Cap and Trade is a scheme under which the gov't sells permits to pollute in a market? Sorry but if I know what Cap and Trade, is it's in spanish, not english, so I can't coment on that. Though I think that maybe there should be a federal fuel tax once the crisis ends because the gov't will need the money to fix its finances (and would help the enviroment, give incentives to develop alternatives to fuel, etc).

Right now the gov't must start spending or lowering taxes to reactivate the economy as long as the recovery doesn't come from the private sector. The spending should not be done in roads and bridges to nothing like in Japan in the 1990s though.

Wether you look at Blue Chip forecasts or bonds spreads, everything signals that the market expects inflation to stay low for the next 5 years AFAIK, in fact if I ain't mistaken the market expects inflation to stay around 2% in the near future. If expected inflation raises then I'll worry, but not for now. I didn't understand the Argentina followed by Japan idea, both countries were different realities back then (late '80s, Japan's bubble was about to end while Argentina had four-digit inflation).

A more interesting thing would be to see what the Fed's exit strategy is.

Well that depends on, Japan has problems with its deflation up to this day so it isn't that simple. I think that the stimumulus is fine as long as expectations remain anchored at a moderate level (AFAIK the Fed's unofficial target is 2% so I'd say that 2% is a moderate level, by the way it would be great if the Federal Reserve Act was changed so the Fed could finally set an inflation target), and as long as there's a way to pay the debt that it's causing (which means more taxes/less spending in the future).

At this rate Andak, there will be massive riots in Detroit.

Time for China to Split -- Change We Need....http://www.discussworldissues.com/fo...es/tongue2.gif

100+ Million Deaths ?....http://www.discussworldissues.com/fo...ies/unsure.gif
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Every party on the outs runs on the "The guys in charge now will wreck your life" approach. No one seemed to mind for 8 years while we handed the keys to Bush who drove the whole bus off the cliff. Where do you think these deficits come from?

http://www.u-s-history.com/pages/h1642.html

Here, Hoovervilles. Surely things aren't this bad in your neighborhood????http://www.discussworldissues.com/fo...ies/lolers.gif