ECONOMY: Budget Deficit and the National Debt

The national debt stands at $7.2 trillion and www.publicdebt.treas.gov..." target="_blank" class="postlink" rel="nofollow">growing. Last year the Government spent $318 billion on interest payments in addition to its other budget www.federalbudget.com..." target="_blank" class="postlink" rel="nofollow">obligations. The Bush administration plans a budget deficit of almost half a trillion dollars for fiscal 2004. Is this sound economic policy?

In February the projected budget deficit was pegged at $521 Billion sending shivers into the international markets. That number has since been revised to $445 Billion.

The U.S. budget deficit will hit a record $445 billion this year, according to a White House report on Friday that is sure to fuel election-year wrangles about President Bush's economic policies. � The figure is well above the 2003 shortfall of $374 billion, the prior record in dollar terms. But the mid-session review forecast is $76 billion less than the $521 billion the White House projected in February. story.news.yahoo.com.../nm/20040730/bs_nm/bush_budget_dc" target="_blank" class="postlink" rel="nofollow">Source

The IMF is worried as well as former US Treasury Secretary Robert Rubin:

The announcement by the Bush administration [in February] that it plans a budget deficit of $521 billion for the 2004 fiscal year�a record in dollar terms�is certain to bring further warnings of the dangers to the world financial system posed by the escalating US debt. Last month the International Monetary Fund published a report stating that there were �significant risks� for the American economy and the rest of the world from growing US budget deficits. Significantly its warnings were echoed in a paper co-authored by former US Treasury Secretary Robert Rubin which was presented to a meeting of the American Economic Association in early January. www.wsws.org..." target="_blank" class="postlink" rel="nofollow">Source

There is an excellent article titled "This is As Good As It Gets" summing up the current economic situation in the US. Near the end of the article is a graph relating to DEBT. There are two very large peaks on the graph. One is right now. I'll give you one guess as to when the other peak was.

More background on the possible DEBT crisis looming can be found in the thread titled "Conditions Ripe for Recession/Depression?"

What are the various party platforms with respect to the Deficit Spending and Debt situations?

To add some examples of the Bush administrations damaging economic decisions to the argument I will post an article from 2003. Old news is still good news, and informative for all.

Let's begin with some examples.

Together, the 50 state governments are facing deficits of $30 billion this year and $82 billion next.

In Massachusetts, the state cut health coverage for 36,000 of its poorest residents and slashed nearly 50 percent of the beds at detox facilities.

Oregon has shortened the school year by 14 days, and is cutting prescription drugs benefit for people with schizophrenia and mental illness.

In San Francisco, planned cuts include the suspension of cost-of-living adjustments in aid to the disabled and seniors, limiting dental care for Medi-Cal recipients and cutting $250 million each from money sent to counties and cities.

In New York City, Mayor Bloomberg plans to close eight firehouses next month. The firefighters union has won at least a temporary reprieve from the city's plan to cut staff at 49 engine companies. This comes in light of the Sept. 11 attack on the World Trade Center, in which 343 firefighters died.

Bloomberg also plans to layoff more than 4,500 municipal workers. In response to the budget cuts, over 10,000 residents and union members protested in front of City Hall yesterday.

source: DNews