Sorry...

[Douglas]

yes' date=' that was quite a misstep on my part. sorry about that. in the first quarter of 2004 it was reported that the budget was 5.4% of GDP. 63% came from an ultra biased source who i shouldnt of even considered using. USA today was where i got the 477 billion dollars.

http://www.cnn.com/2004/US/01/26/budget.deficits.ap/ and cnn.[/quote']

WoW, even from an ultra biased source, I wouldn't think anyone would have the balls to inflate the number from 5.4% to 63%

 

As for the highest deficit in history, I would imagine that if Kerry or Bush is elected, the deficit in 2008 will be the highest in history.

 

Pangloss...good link. I never knew the difference between GDP and GNP.

[Pangloss]

I never knew the difference between GDP and GNP.

 

Yeah that's become all the rage these days, to split that hair as finely as possible in debate (in terms of which number is more "valid"). I don't see much point to that, really, but I agree that it's interesting, and perhaps valuable in terms of economic analysis.

[r1dermon]

i agree pangloss, no matter who takes office the deficit will rise to around 700billion by 2010. the 477 billion is an estimate i believe. but there is fair certainty about it.

[Pangloss]

Yah that's an important point, and actually I think that if left unchecked it will rise a lot more than that.

 

This is something that's way under-appreciated about the deficit. People just assume that it's a one-shot deal. Just because we spent $477 billion "too much" in 2004 doesn't mean we have to spend $477 billion "too much" next year, right?

 

But the government doesn't work that way. The money went to pay for programs that will be right back at the till with their hand out again next year! It's exactly the same problem you had last year, only it's WORSE, because (a) inflation is actually a HUGE problem when you're talking about $2 trillion being inflated, and (b) the extra debt you accumulated from the deficit last year also has to be serviced, so in order to pay for the same services you paid for with a $477 deficit last year, you have to actually pay more. It's just plain NASTY.

 

And of course every dollar of that goes right into the debt. The folks at Centrists.org have an interesting analysis showing the debt (not the deficit) approaching 50% of GDP by 2010 and 100% of GDP by 2025. That, of course, is assuming that the GDP continues to grow at the present rate, which is the greatest rate of any western nation (so is that realistic?). That's how fast the debt is growing. It's no joke.

 

This article is worth reading:

http://www.centrists.org/pages/2004/05/29_budget_baseline.html