Tuesday, September 9, 2008

We Got The Deficit Blues

The federal deficit will exceed $400 billion this fiscal year, says the Congressional Budget Office. The CBO admitted today what we’ve been forecasting all year: Government spending in 2008 was way more out of control than the CBO anticipated.
When the fiscal year ends this month, the CBO says $407 billion will be on the wrong side of the federal balance sheet. That’s 2½ times higher than last year’s $161 billion budget deficit. Dubya’s 2004 record deficit of $417 billion is still intact, for now…
None of this, by the way, includes the Fannie and Freddie bailout. So kiss 2009 buh-bye... the CBO projects next year’s deficit closer to $500 billion. “The federal budget is on an unsustainable path,” said a statement from the CBO. Thanks for the memo.
Crap, how will the government pay for all this? Treasuries? Definitely. Taxes? Probably. But we’re missing something… oh, right! Global military interventionism!
The Pentagon proudly announced a $7 billion deal with the UAE today. In exchange for its petrodollars (that the U.S. likely sent there in the first place), the UAE will get a state-of-the-art missile defense system to “protect” the region from Iran.

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