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Sunday, October 16, 2005

CALL HIM THE DEFICIT KING

This year's Federal Deficit looks like it will come in at 319 Billion Dollars, the third highest in US history. Last year's was the all time highest at 412 Billion, and 2003 - the second highest at 375 Billion. Next year we will feel the full financial impact of this years natural disasters - I can't wait. I mean he's got his hat trick, gotta go for the grand slam, right?

Comments:
That's a little misleading as it doesn't account for either inflation or the size of the economy.

In reality, as a percentage of GDP, the deficits of the last three years are nowhere near record highs.
 
So are you saying that things are just fine running hundreds of billions of dollars in debt three years running? Spend all you like, we'll make more?
 
Not at all. Bush has always frustrated me because he has shown no interest in shrinking the size of the federal government.

But the size of the deficits in comparison to the size of the economy, which is probably the more accurate measure, is not at a record high.
 
How do think all of this will affect taco futures?
 
how is the relationship between the deficit and the economy?

In other words, how are we doing?
 
We are running a pretty big debt load and that is definitely related to the double whammy of tax cuts and Bush's unreal spending spree.

That being said, economic growth has been pretty robust lately. The most interesting numbers will likely be the next two quarters because they will be the first to include the increase in fuel prices for home heating. I suspect that will be the most immediate measure of the effects of higher gas and Katrina. The summer driving season isn't as big of an indicator because you can choose not to drive to see the World's Largest Ball of Twine, but you generally don't choose not to heat your house.
 
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