Despite Administration Claims, Federal Deficit is not Falling
Recent claims by the Obama administration that it has cut the federal deficit to a significant degree may have been exaggerated by the administration and the media, according to Tea Party activist and finance blogger Karl Denninger. A libertarian who strongly opposes deficit spending by the government, Denninger recently argued that the deficit remains about the same as it has been for the last several years.
According to the April 30, 2013, edition of the Monthly Treasury Statement (MTS), which covers the start of fiscal year 2013 (October 2012) through April 2013, FY 2013 receipts have totaled $1.603 trillion so far vs. $2.090 trillion in outlays, producing a current budget deficit of $487 billion. Compared to the $719 billion year-to-date deficit for April 2012, this looks like good news indeed.
However, Treasury's projections for the second half of FY 2013 show additional receipts of $1.108 trillion vs. additional spending of $1.594 trillion, for total FY revenues of $2.712 trillion, total spending of $3.684 trillion, and a total deficit of $972.9 billion. Although Denninger does the math differently to come up with a deficit of $1.069 trillion, neither number demonstrates a substantial drop from the 2012 deficit of $1.089 trillion.
Nevertheless, there is good reason to ask if the federal budget deficit really matters. In an age of slow growth and double-dip recessions around the world, and with the economic theory underlying austerity in tatters, deficit spending may be the tonic needed to finally lift the economy to real prosperity, as it did at the end of the Great Depression.
To Learn More:
Everything You Heard About the Deficit Falling Is Wrong (by Nomi Prins, AlterNet)
To The Media: Stop Sucking Obama On The Debt (by Karl Denninger, Market Ticker)
Fastest Growing Contributor to National Debt is…Interest on National Debt (by Noel Brinkerhoff, AllGov)
CEOs Use Smokescreen of Federal Debt to Promote Corporate Tax Breaks (by Noel Brinkerhoff, AllGov)
A French Solution to Budget Deficits…Tax the Tobacco Industry by Caroline Moisson, AllGov France)
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