Congressional Budget Office reports another $1 trillion deficit Read more: http://www.politico.com/

[vox]

Nothing new here but the article reads awesome....

Like Aunt Cassandra coming down from the attic, the Congressional Budget Office steps squarely into the 2012 campaign season with the 147-page report which might have been subtitled “It’s not just the economy stupid, it’s also the debt.”

Read more: http://www.politico.com/news/stories/0112/72205.html#ixzz1l5JtgJNY

 

[pmbug]

... Indeed the $1.079 trillion deficit now projected for the 2012 fiscal year ending Sept. 30 is wider than what the added CBO had predicted in August, ...

Surprising, this is not.

"It's the spending, stupid."

 

[bushi]

...if only people could spend their way out of financial troubles...

Interestingly, when you apply the same logic to families/individuals, everyone seems to grasp immediately "it won't work". But somehow, when applied to states/economies, all the members of the public became entranced, enchanted, start saying uuuuuh.... aaaaahhhhh.... mmmmmm.... and take all that shit right back up their arses.

And suddenly, this utter nonsense is being supported by everyone (bar statistically insignificant "weirdos", or boutique marginal politics, marginalized and treated a little like a harmless funny mascots).


"Only two things are infinite, the universe and human stupidity, and I'm not sure about the former." -Albert Einstein

 

[DSAbug]

"It's the spending, stupid."

Well.. considering that interest payments are 7% of the budget it is a piece of the puzzle for sure. That is with rates really close to zero. If rates start rising, the interest payments as a % of the budget is going to rise exponentially.

 

[DSAbug]

Interestingly, when you apply the same logic to families/individuals, everyone seems to grasp immediately "it won't work". But somehow, when applied to states/economies, all the members of the public became entranced, enchanted, start saying uuuuuh.... aaaaahhhhh.... mmmmmm.... and take all that shit right back up their arses.

My inlaws are like that. I've been beating it into them since 2005 yet they still don't get it. They even bought a basket of commodities index that specifically left out gold and silver. lol.

 

[bushi]

That is with rates really close to zero. If rates start rising, the interest payments as a % of the budget is going to rise exponentially.

...and consequently - that is precisely why they will NOT be able to fight impending inflation by rising interest rates; debt servicing would collapse the budgets all over the planet.

Without at least some kind of default (I don't know, partial abolition of the govt debts - most probably... That is why I think bonds/cash will not be very attractive to people/investors, once they start waking up to the reality) Better yet, sound monetary/banking/derivatives reform, from the ground up? But that ain't going to happen, too much vested interest in current system = way too much invisible power. Everything will be carried "business as normal", right up until we hit the wall.