Now we're seeing that in our new budget, the US government will be borrowing 46 cents on every dollar it spends. Any person who did that in his personal finances would go bankrupt. Any company that did that would eventually fold sooner or later. And any government that does that (as our government is doing now) will eventually shipwreck it's economy. Living on borrowed money is simply unsustainable in the long term. You and I know that. But why does the goverment seem to not know that?
The financial chickens, as they say, will come home to roost one day. And when it happens, its going to be ugly.
From the AP:
By ANDREW TAYLOR
WASHINGTON (AP) - The government will have to borrow nearly 50 cents for every dollar it spends this year, exploding the record federal deficit past $1.8 trillion under new White House estimates. Budget office figures released Monday would add $89 billion to the 2009 red ink - increasing it to more than four times last year's all-time high as the government hands out billions more than expected for people who have lost jobs and takes in less tax revenue from people and companies making less money.
The unprecedented deficit figures flow from the deep recession, the Wall Street bailout and the cost of President Barack Obama's economic stimulus bill - as well as a seemingly embedded structural imbalance between what the government spends and what it takes in.
As the economy performs worse than expected, the deficit for the 2010 budget year beginning in October will worsen by $87 billion to $1.3 trillion, the White House says. The deterioration reflects lower tax revenues and higher costs for bank failures, unemployment benefits and food stamps.
Full article: http://apnews.myway.com/article/20090512/D984FCB80.html