by VOX DAY
As the media and political world continue to occupy themselves with the Republican horse race, the elected representatives of both the Republican and Democratic parties are quietly continuing to spend the nation deeper into the debt abyss. While the amusingly misnamed Budget Control Act of 2011 was supposed to settle the debt-ceiling discussion until after the presidential election this November by increasing the amount of permissible debt by at least $2.1 trillion – a mere 14 percent of American GDP – the speed at which the Congress and the administration have been whipping out the government credit card means that there is a reasonable chance that they will burn through that additional debt in barely one year.
This increased federal spending is the source of the economics reports that has been less dismal than expected, which has wrongly been taken as evidence that the economy is finally beginning to recover a little. It can be clearly seen in the Federal Reserve’s credit statistics, as the Z1 report shows that after declining steadily from the first quarter of 2010, the rate of increase in federal debt began to pick up again in the third quarter of 2011. Approximately $389 billion in new debt was amassed, thus indicating an annual increase of 16 percent. At this rate, outstanding federal debt, which by some measures already exceeds the size of the national economy, will double again in six years.
No comments:
Post a Comment