- 2008 federal budget deficit was $5.1 trillion, not the $455 billion previously reported by CBO
- U.S. Government GAAP Accounting Federal Budget Deficits (Chart)
- Rules often fail us – Financial failures equate to more rules from the toolbox…
- Legislature adjourns with no budget; governor prepares to lay off 10,000
- Simon Johnson & Bill Moyers (Repost for anyone who missed it)
- Capitalism Needs a Sound-Money Foundation
- Bank of England will buy gilts to boost economy
- U.S. trade deficit shrinks 4 percent in December
- Bernie Madoff – Impossible for a violation to go undetected (Video)
- Feedback loop
- Hat Tips to CM, Katherine, Denny, PineCarr (pressed for time, didn’t credit each article)
The real 2008 federal budget deficit was $5.1 trillion, not the $455 billion previously reported by the Congressional Budget Office, according to the "2008 Financial Report of the United States Government" as released by the U.S. Department of Treasury.
The difference between the $455 billion "official" budget deficit numbers and the $5.1 trillion budget deficit cited by "2008 Financial Report of the United States Government" is that the official budget deficit is calculated on a cash basis, where all tax receipts, including Social Security tax receipts, are used to pay government liabilities as they occur.
I believe I correctly backed into that $5.1 Trillion number below (drop me a comment if anyone interpreted this differently).
Reporting from Sacramento — With lawmakers still unable to deliver a budget after three days of intense negotiations, Gov. Arnold Schwarzenegger prepared to lay off 10,000 government workers and his administration said it would halt the last 275 state-funded public works projects still in operation.
The projects, which cost $3.8 billion and include upgrades to 18 bridges and roads in Los Angeles County to protect them from collapsing in earthquakes, had been allowed to continue as others were suspended because the state was running out of cash.
Let’s go back to the gold standard.
If the very idea seems at odds with what is currently happening in our country — with Congress preparing to pass a massive economic stimulus bill that will push the fiscal deficit to triple the size of last year’s record budget gap — it’s because a gold standard stands in the way of runaway government spending.
Under a gold standard, if people think the paper money printed by government is losing value, they have the right to switch to gold. Fiat money — i.e., currency with no intrinsic worth that government has decreed legal tender — loses its value when government creates more than can be absorbed by the productive real economy. Too much fiat money results in inflation — which pools in certain sectors at first, such as housing or financial assets, but ultimately raises prices in general.
Inflation is the enemy of capitalism, chiseling away at the foundation of free markets and the laws of supply and demand. It distorts price signals, making retailers look like profiteers and deceiving workers into thinking their wages have gone up. It pushes families into higher income tax brackets without increasing their real consumption opportunities.
Mervyn King said the Bank would start buying commercial paper this week, and would most probably move on to full-scale quantitative easing, which involves buying securities but printing money to pay for it, before long.
In a further surprise, Mr King said the Bank was prepared to buy government debt in an effort to bring the economy back on track – something which, so far, neither the Federal Reserve or European Central Bank has embarked on.
He said: "The projections imply that further easing in monetary policy may well be required. That is likely to include actions aimed at increasing the supply of money in order to stimulate nominal spending," adding that the Bank would consider buying gilts – government bonds – as part of the scheme.
The news – alongside a Bank economic forecast which was far more pessimistic than many City analysts – sent the pound careering downwards against other currencies.
WASHINGTON (Reuters) – The U.S. trade deficit shrank 4 percent in December, as the global financial crisis cut U.S. imports and exports for the fifth consecutive month, a U.S. Commerce Department report showed on Wednesday.
The $39.9 billion trade gap was the smallest since February 2003, but bigger than a consensus estimate of $36.0 billion from Wall Street analysts. The December shortfall followed a much bigger contraction in the trade gap in November.
U.S. imports of goods and services fell 5.5 percent in December, following an 11.9 percent drop in November, as businesses and consumers cut back on spending in the face of mounting economic woes.
Imports of autos and auto parts were the lowest since May 1999. Another big drop in the average price of imported oil to $49.93 per barrel, the lowest since December 2005, helped push the overall import tally lower.
U.S. exports of goods and services fell nearly 6 percent for a second month in a row, as the financial crisis took a bite out of foreign demand. Overall U.S. goods exports were the lowest since October 2006, and auto and auto parts exports were the lowest since November 2004.
last we left eastern europe, the rumblings of an emerging market crisis of the sort last seen emanating from the thai baht in 1998 were growing loud. now we return to find systemic collapse imminent. zero hedge, the telegraph and the financial times all report.
in some respects a comparison to 1998 isn’t valid, as western banks were nowhere near as systemically compromised by the collapse of east asia as they are about to be by the former soviet bloc states along the eastern border of the eurozone. as befits the truly global nature of this crisis, a chain reaction feeding from states like ukraine through austria and italy to the heart of western capitalism looms.