Today’s Treasury Budget release, while being reported as though it were a surprise, confirms something we have known for a long time. Government has thrown caution to the wind and will print and spend endlessly in a futile attempt to stem the tide. For those not keeping score, the numbers looked something like this:
Jan 2008 – $17.8 Billion
Feb 2008 – $175.6 Billion
March 2008 – $48.1 Billion
April 2008 + 159.3 Billion
May 2008 – $165.9 Billion
June 2008 + $50.7 Billion
July 2008 – $102.8 Billion
August 2008 – $111.9 Billion
September 2008 + $45.7 Billion
October 2008 – $237.2 Billion
November 2008 – $164.4 Billion
December 2008 – ?
Clearly, the stresses of the massive financial industry bailout are starting to show up in the government’s deficit in a big way. Amazingly enough, the slackening in the trade deficit was promised to be the trend that balanced the government’s current account. But the trade deficit hasn’t cooperated all that much despite lower oil prices and the budget deficit is blowing wide open. In fact, over the past two months, the Federal government is running at an annual pace of $2.4 Trillion in budget shortfalls alone. Add in future bailouts, and the likely economic and fiscal stimulus and we’re talking about some serious money.
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