On The One Year Anniversary Of The US Downgrade
From Bill Buckler, author of The Privateer
The Disconnect Between Mouth And Brain
A year ago, at the beginning of August 2011, the Obama Administration and the US Congress came to an “agreement” on financing the borrowing of their government for the foreseeable political future. That foreseeable future stretched out until November 6, 2012, the date of the election. The part of the deal which was trumpeted the loudest was a “plan” to cut deficit spending by $US 1.2 TRILLION - over the next TEN years. On July 27, the Obama Administration’s Office of Management and Budget (OMB)announced with great fanfare their latest “estimate” of the deficit for the fiscal year ending on September 30, 2012. It was $US 1.21 TRILLION, down 9 percent from the $US 1.33 TRILLION they had estimated in February. According to the White House, the major reason for this downward revision is the fact that the US Congress has blocked many of Mr Obama’s tax and spending plans. The February forecast assumed they would take place in the 2012 fiscal year. The new forecast assumes that they will take place in the 2013 fiscal year.
As of July 31, 2012 - with two months left to go in fiscal 2012 - US Treasury funded debt was already up by $US 1.14 TRILLION over the year to date. But there is something here that very few commentators have wasted any ink on. A year ago, the budget “deal” concocted between Mr Obama and his Congress was ballyhooing a “plan” to cut $US 1.2 TRILLION off annual budget deficits over a DECADE. Now, the projection for the 2012 budget is that the US government will add that amount to the funded debt of the US Treasury over ONE YEAR. This would be hilariously funny if it wasn’t so tragic. What is even funnier - and more tragic - is that the entire world is “depending” on the people who concoct this stuff.