Obama budget projects $1.75 trillion deficit in 2009

[LargoWinch]

Holy Cow! I haven't seen any direct post on iTulip regarding this little fact.

Are we now so numb by the recent economic events that a $1.75 Trillion deficit goes unnoticed?

I think iTulip forecast's of a 10% deficit to GDP ratio might prove conservative.

Maybe that is also why Crude Oil is up around 10% this week?

PS: Where is the deflation vs. inflation thread again? (sorry I had to say that :p)

By JACKIE CALMES and ROBERT PEAR
Published: February 26, 2009

President Obama’s new budget blueprint estimates a stunning deficit of $1.75 trillion for the current fiscal year, which began five months ago, then lays out a wrenching change of course as he seeks to finance his own priorities while stanching the flow of red ink.

Artile link:
http://www.nytimes.com/2009/02/27/us...l?ref=business

[Slimprofits]

Re: Obama budget projects $1.75 trillion deficit in 2009

from the Time article: The deficit he inherited, a shortfall of more than $1 trillion as the current fiscal year began, has continued to swell in recent months with additional bank bailouts, the first wave of spending from a newly enacted stimulus plan and the continuing costs of the wars in Iraq and Afghanistan.

It's gone up by $800 billion in one month? Amazing.

[hayekvindicated]

Re: Obama budget projects $1.75 trillion deficit in 2009

It cannot be funded through legitimate capital raising. Japan is in no condition to keep buying US debt in significant amounts to fund the deficit. The Chinese will buy some as well but they cannot buy enough to fund the entire deficit.

The only way it can and will be funded is through the Fed buying Treasuries with freshly printed money.

The road to ruin.

[audrey_girl]

Re: Obama budget projects $1.75 trillion deficit in 2009

It cannot be funded through legitimate capital raising. Japan is in no condition to keep buying US debt in significant amounts to fund the deficit. The Chinese will buy some as well but they cannot buy enough to fund the entire deficit.

The only way it can and will be funded is through the Fed buying Treasuries with freshly printed money.

The road to ruin.

absolutely -

don't forget the gulf/arab states too with oil so low - they are limited to what they can buy too.

not that it matters in the big scheme of things, but which do you think applies:

(1) Obama is an idiot president, like the last one
(2) Obama knows how precarious the situation is and is desparate
(3) Obama is being set up to fail big time by those in the know
(4) all of the above

surely people like volker, bernanke and others know where this is going? what is there end-game, is it to kill the dollar, do a major reset with a new currency?

just thinking out loud

[gwynedd1]

Re: Obama budget projects $1.75 trillion deficit in 2009

It cannot be funded through legitimate capital raising. Japan is in no condition to keep buying US debt in significant amounts to fund the deficit. The Chinese will buy some as well but they cannot buy enough to fund the entire deficit.

The only way it can and will be funded is through the Fed buying Treasuries with freshly printed money.

The road to ruin.

Hi hayekvindicated;,

Too bad that is only part of the solution. I wish the Fed would buy all those treasuries if they would raise interest rates and jack up the reserve requirement(on its way to 100%). A nice follow up would be to defenestrate the Fed and make treasuries legal tender. However since they are just trying to crank out more bank credit its going to turn out badly. We will either sag and go nowhere or inflate rather embarrassingly.
Actually even better would be to suspend the income tax and jack up interest rates accordingly as a cocktale for the lets get rid of this financial system party. However unfortunately, the financiers have all the champaign and balloon bubbly.

[hayekvindicated]

Re: Obama budget projects $1.75 trillion deficit in 2009

absolutely -

don't forget the gulf/arab states too with oil so low - they are limited to what they can buy too.

not that it matters in the big scheme of things, but which do you think applies:

(1) Obama is an idiot president, like the last one
(2) Obama knows how precarious the situation is and is desparate
(3) Obama is being set up to fail big time by those in the know
(4) all of the above

surely people like volker, bernanke and others know where this is going? what is there end-game, is it to kill the dollar, do a major reset with a new currency?

just thinking out loud

I don't think Obama is simply an idiot. I do not believe that Bush was simply an idiot either.

Both were, however, democratic politicians who had to pander to the opinion of the moment. The more powerful communications technology has become, the more infantile politics has become. The people who elect the politicians are by and large ignorant (as Churchill said, "the best argument against democracy is a five minute conversation with the average voter") and also impatient at the same time.

In our day and age, the politicians must be seen to be "doing something". They must, therefore, engage in a combination of informed action (by relying on their advisors) and some playing to the gallery. Obama is an excellent demagogue in this regard and he is very good at the latter. On economics, he understands very little or almost nothing and must rely on his advisers (who are economists - and therefore understand as little about the problems as he himself does, except that they are deemed "experts" and can do more damage).

To top it all, you have one of the most corrupt political systems of all in which every conceivable interest group must get its pound of flesh. The end result is this ridiculous "stimulus" package which will probably destroy America's currency.

I know that there are a lot of believers in conspiracy theory. I for one have never believed in them. I do believe that there are a lot of Wall Street interests that funded his campaign for a reason - but in that regard they are no different from other interest groups in America (except that they have more money at their disposal).

The current crisis is the culmination of an American delusion fostered since the end of WWII which posited that limitless prosperity was not just an American dream but a fact and an entitlement. That delusion is about to be shattered for good. It is a good thing I believe.

[cjppjc]

Re: Obama budget projects $1.75 trillion deficit in 2009

I don't think Obama is simply an idiot. I do not believe that Bush was simply an idiot either.

.

Bush simply IS an idiot.

http://www.youtube.com/watch?v=eKgPY1adc0A

[hayekvindicated]

Re: Obama budget projects $1.75 trillion deficit in 2009

Bush simply IS an idiot.

http://www.youtube.com/watch?v=eKgPY1adc0A

I disagree.

[cjppjc]

Re: Obama budget projects $1.75 trillion deficit in 2009

I disagree.

I couldn't disagree more. High IQ test do not prove your not an idiot. I used to know a young girl who kept a solid 100 average throughout high school. Never got a question wrong. I swear. You could tell her anything and she would believe you. Once as we passed through the border into Canada she exclaimed "It doesn't look any different." We hadn't gone 2 miles yet.

I'm not saying George Bush should be underrated as a politician. I remember the lady he beat for the office of Governor of Texas saying not to underestimate him. (Ann Richards. It just came to me.) I'm saying he's an idiot.

[orion]

Re: Obama budget projects $1.75 trillion deficit in 2009

My first reaction to this budget and the audacity of the government that somebody is going to keep supporting their habit by buying treasuries that pay close to nothing; is I am going on strike. Why do I even own the stupid things? Oh yeah right my mattress would be too lumpy and I can't trust the banks (thanks to who?). Well I am motivated to find some option (yeah gold but I don't want too much bling) and my future savings are going elsewhere.

[LargoWinch]

Re: Obama budget projects $1.75 trillion deficit in 2009

My first reaction to this budget and the audacity of the government that somebody is going to keep supporting their habit by buying treasuries that pay close to nothing; is I am going on strike. Why do I even own the stupid things? Oh yeah right my mattress would be too lumpy and I can't trust the banks (thanks to who?). Well I am motivated to find some option (yeah gold but I don't want too much bling) and my future savings are going elsewhere.

orion, I think you mean Tea Partee:

http://www.wnd.com/index.php?fa=PAGE.view&pageId=89788

[Uno]

Re: Obama budget projects $1.75 trillion deficit in 2009

I believe there was a stratgic "push the pain" by the neo-liberals onto the Obama administration so republicans can blame Obama on the depression next election, or at least share the blame on Bush.

Almost seems like Paulson's bailout was to postpone the crash so that the real great depression crash happens on Obama's watch.

I wish Obama would have let the crash happen right away and so put the blame on Bush where it belongs. Then start to work the country out from the bottom up, rather then trying to fight a losing battle.

I would not be suprised if Bernake, Paulson, ect.. are in on the anti-Obama crowd. I believe many of the most powerful democrates are in the anti-Obama crowd - Clinton, Reid, Frank, ... (other neo-liberals)

Bush is not an idiot but an extreme neo-liberal that drank the kool-aid in a big way, resulting in the worst administration in US history.

It is lucky for us that Bush was not a great speaker like Obama.

Everyone already forgets the choice was McCain/Palin, Clinton, or Obama. Obama was and still is the best choice by far, a huge move in the right direction.

If you thought Obama would magically turn into Ron Paul, ...

The danger is a huge anti-Obama campaign (already started) by the neo-liberal crowd (democrates and republicans) and then a big shift back in the wrong direction next election.

The reality in America is that there is no democracy. The country is run by 2 monopolistic groups that both share similar neo-liberal ideology.

The retarded voters swing back and forth between them arguing about abortions or they pick a side based on which TV news station they watch or which city / state they live in.

Obama is a huge threat to the establishment, his victory was a shock, and the establishment is working hard to make him a one term president - Democrates and Republicans.

The best thing you can do is support Obama and keeping voting the elite establishment out of congress and the senate.

If someone new comes along that will go even further away from the neo-liberal cult, then great.

But going back and voting for another Bush, McCain, or Clinton is NOT the answer, and I fear that is what many are being sucked into.

[Uno]

Re: Obama budget projects $1.75 trillion deficit in 2009

The real tea party was last Dec 16th 2007 Ron Paul's tea party during the election. Where was CNBC and Rick Santelli then? Answer: nowhere.

http://www.youtube.com/watch?v=DKZmIzEMUN8

Rick Santelli works for CNBC / GE and does NOTHING that is not approved and scripted by them.

He is part of the banker crowd running a huge anti-Obama campaign because of Obama's mortgage relief act hurts thier profits in a big way.

The banking lobby has spent massive amounts of anti-Obama money in D.C. last month. The military and big pharam and big agriculture are also ramping up huge anti-Obama lobby money as well.

This Santelli tea party stuff is a scam run by the same scumbags that ruined the country. They are trying to get Obama out ASAP and another neo-liberal McCain, Bush, or Clinton type back in.

[Uno]

Re: Obama budget projects $1.75 trillion deficit in 2009

This is the real battle in D.C., the rest is noise.

http://thehill.com/business--lobby/b...008-02-27.html

... and it looks like the bankers are going to win, thanks to scumbags such a Rick Santelli & CNBC working up the people.

What is crazy is that Bernake's taxpayer bailout billions are probably being used to lobby (bribe) Washington to work against taxpayers and favor banks/lenders.

I wonder how much of the bank bailout has been spent in D.C.?

The bankers do not want individuals to have the same bankruptcy laws as corporations. Its fine for GM to go into bankruptcy and get its debt wiped out at taxpayers expense every 5 years, but for individuals... well they are of course immoral. LOL.

The reality is that bankruptcy is the correct option for millions of Americans and lenders/bankers will be on the hook for making bad loans.

Bankruptcy is key part of capitalism, especially for individuals, it is as American as applie pie. The bankruptcy risk should have been built into lending risk models and if as a bank you did not account for that...then you deserve to go under. PERIOD.

[c1ue]

Re: Obama budget projects $1.75 trillion deficit in 2009

Uno,

You're doing a fine job as Obama 2012 or Clinton 2012, but your facts continue to be all wrong.

Obama is spending the TARP that Paulson supposedly used to postpone the problem. That was a freebie.

As for push the pain - how exactly does an outgoing administration push off an economic collapse?

Sure, Bush had a stimulus in April of last year.

And wow! Obama is having a stimulus in March of this year. And it is also primarily tax cuts.

Change you can believe in?

TARP was a bank bailout of $700B. Obama's Treasury pick, Geithner, along with this Citi/Harvard cohort Summers, is spending the 2nd half of that.

Obama now has $750B for TARP II.

Change you can believe in?

And what about the $1.75T deficit proposed for this next year?

Bush had 'only' a $1T deficit - even with his own stimulus and TARP.

Change you can believe in?

Obama is now continuing the Patriot Act/FISA wiretapping capabilities - much less trying to repeal this thoroughly anti-liberty program.

Change you can believe in?

Obama is increasing troops in Afghanistan. Delaying withdrawal from Iraq, and even then defining 'withdrawal' as 50,000 troops or less there. He has kept the same Secretary of Defense.

Change you can believe in?

Apparently a slogan of 'get out of Iraq' and a symbolic closure of Guantanamo (and dumping the prisoners on someone else) is enough for you. Oh, and some nice vague speeches.