U.S. budget deficit shrinks by over $200 billion, reaches 4-year low
Oct 12, 2012 4:48 PM EDT By Steve Benen – maddowblog
As the job market improves and unemployment falls, one of the central attacks from Romney/Ryan against President Obama has to do with the deficit. The attack overlooks Paul Ryan’s role in creating the massive deficit, the inconvenient fact that Romney hasn’t presented a deficit-reduction plan, and the problem that the Romney/Ryan agenda would appear to make the deficit significantly worse, but that their story and they’re sticking to it.
It’s worth noting, then, that as of today, the U.S. federal budget deficit has shrunk — a lot.
I put together this new chart reflecting the deficit over the course of the last four years. It starts with the figures released in 2009, when the deficit reached a record high of $1.4 trillion. Why is the column in red? Because, thanks to fiscal years, Obama inherited a deficit of nearly $1.3 trillion from Bush/Cheney the moment he took the oath of office.
This year, however, according to the official data published by the Treasury Department, the deficit was $1.089 trillion.
When the president’s critics spin this, they’ll say, “The deficit was over $1 trillion again,” and that will be accurate. What the criticism fails to note, however, is that (a) the deficit is now much smaller than it was when Obama took office; (b) this is the smallest deficit we’ve seen in four years; (c) this new figure represents an improvement of over $200 billion since last year; and (d) the main drivers of the remaining deficit are Republican policies.
I should note that all of this is predicated on the assumption that deficits are something bad to be avoided, and that a shrinking deficit is necessarily encouraging news. There’s a competing school of thought — which I’m sympathetic to — that suggests the deficit is currently too small, and that given economic conditions, interest rates, and the current yield of Treasuries, we should be borrowing far more and investing that money in job creation.
But for the purposes of political conversation, such an argument is probably a non-starter; the public has come to believe a deficit that’s getting smaller is good news.
If so, Obama has something to brag about — very few presidents of the last generation can say they managed to shrink the deficit by over $200 billion, even during difficult economic times.
US vs World Economic Recovery Comparision:
International Demand for U.S. Assets Rises on Europe
Sep 18, 2012 8:07 AM PT By Meera Louis – bloomberg
International purchases of U.S. financial assets rose more than sevenfold in July as investors sought shelter from the debt crisis in Europe.
Net buying of long-term equities, notes and bonds totaled $67 billion during the month, up from net purchases of $9.3 billion in June, the Treasury Department said today in Washington. Economists surveyed by Bloomberg projected net buying of $27.5 billion of long-term assets, according to the median estimate.
“The data suggest that European private investors used Treasuries and agencies to protect against deterioration in the euro financial markets in July,” said Guy LeBas, chief fixed- income strategist at Janney Montgomery Scott LLC in Philadelphia. “That trend will likely continue into August’s data.”
U.S. assets have maintained their attraction as Spanish banks are hemorrhaging deposits and European leaders are still squabbling over the next steps needed to overcome the sovereign debt crisis. A Sept. 14 European Union finance ministers meeting in the Cypriot capital of Nicosia deadlocked over the timetable for a more unified EU banking sector.
Published on Sep 26, 2012 by BarackObamadotcom
Read the President’s plan: http://OFA.BO/SAzDgd
During the last weeks of this campaign there will be debates, speeches and more ads. But if I could sit down with you in your living room or around the kitchen table here’s what I’d say:
When I took office we were losing nearly 800,000 jobs a month and were mired in Iraq. Today I believe that as a nation we are moving forward again. But we have much more to do to get folks back to work and make the middle class secure again.
Now, Governor Romney believes that with that even bigger tax cuts for the wealthy and fewer regulations on Wall Street all of us will prosper. In other words he’d double down on the same trickle down policies that led to the crisis in the first place. So what’s my plan?
First, we create a million new manufacturing jobs and help businesses double their exports. Give tax breaks to companies that invest in America, not that ship jobs overseas.
Second, we cut our oil imports in half and produce more American-made energy, oil, clean-coal, natural gas, and new resources like wind, solar and bio-fuels—all while doubling the fuel efficiencies of cars and trucks.
Third, we insure that we maintain the best workforce in the world by preparing 100,000 additional math and science teachers. Training 2 million Americans with the job skills they need at our community colleges. Cutting the growth of tuition in half and expanding student aid so more Americans can afford it.
Fourth, a balanced plan to reduce our deficit by four trillion dollars over the next decade on top of the trillion in spending we’ve already cut, I’d ask the wealthy to pay a little more. And as we end the war in Afghanistan let’s apply half the savings to pay down our debt and use the rest for some nation building right here at home.
It’s time for a new economic patriotism. Rooted in the belief that growing our economy begins with a strong, thriving middle class. Read my plan. Compare it to Governor Romney’s and decide for yourself. Thanks for listening.
Read the President’s plan: http://OFA.BO/SAzDgd
U.S. Sees First Debt Reduction Since 2007 as Revenue Rises
Apr 29, 2013 1:41 PM PT By Meera Louis – bloomberg
The U.S. Treasury Department (USGG10YR) projected it will reduce government debt this quarter for the first time in six years as tax receipts exceed forecasts and spending diminishes.
The pay-down in net marketable debt was estimated at $35 billion in the April-June period, compared with a projection three months ago for net borrowing of $103 billion, the department said in a statement today in Washington. Treasury officials also see net borrowing of $223 billion in the quarter starting July 1. The estimates set the stage for the department’s quarterly refunding announcement on May 1, when debt issuance plans will be released.
A sustained economic expansion and across-the-board spending cuts known as sequestration may help deliver the first net decline in debt since 2007, when the government lowered borrowing by $139 billion before the global financial crisis spawned the worst recession since the 1930s. While the economy’s strength is helping boost tax revenue, total U.S. public debt outstanding is approaching $17 trillion.
“This is a substantial revision,” said Thomas Simons, a government debt economist at Jefferies LLC in New York. Still, “it is possible that Treasury will take a wait-and-see approach in evaluating the sustainability of the recent surge in tax receipts before making adjustments” to debt auctions, he said.