Deficit Minutia Watch: Getting Worser and Worser

Deficits getting worse in first half of new fiscal year:

The US budget deficit shot up 15.7 percent in the first six months of fiscal 2011…

The Treasury reported a deficit of $829 billion for the October-March period, compared with $717 billion a year earlier, as revenue rose a sluggish 6.9 percent as the economic recovery slowly gained pace.

The Treasury argued that the pace of increase in the deficit was deceptive because of large one-off reductions in expenditures made during the first half of fiscal 2010, compared with previous and subsequent periods.

Those included a $115 billion reduction in funds spent on the Troubled Asset Relief Program (TARP) -- the financial institution bailout program -- in March 2010.

But 2011 so far has also seen significant increases in spending on defense, Social Security, health and debt service, while receipts have not grown as fast.

"The jump in outlays mostly owed to a smaller estimated reduction in TARP outlays this year versus 2010," said Theresa Chen at Barclays Capital Research.

TARP! Reason's Tim Cavanaugh has had a lot of smart things to say about it, and you should listen.

Comments

[Almanian]

Yep, just saw this on the TEE VEE.

Jeebus, we're so fucked...

[Aresen]

The Treasury argued that the pace of increase in the deficit was deceptive because of large one-off reductions in expenditures made during the first half of fiscal 2010, compared with previous and subsequent periods.

Those included a $115 billion reduction in funds spent on the Troubled Asset Relief Program (TARP) -- the financial institution bailout program -- in March 2010.

That simply does not compute. Since TARP was supposed to be a "one off" program, why should a reduction in expenditures for it mean that the baseline is unreasonably low?

[shrike]

Not only that, a "reduction in funds spent" should be net positive and not add $115 billion to the deficit.

[Red Rocks Rockin]

It would be a net positive if people were working. That's why the U3 means nothing right now and the employed to population ratio is a more accurate indication of the state of the economy (it's still in the shitter, by the way).

[Libertymike]

I have to laugh at all of the blokes, including many here, who championed the candidacy of Scott Brown.

There were many here who did not know that there was a libertarian running for the Senate seat left vacant in the wake of Teddy Kenedy's death. Never mind our ignorance I was chastised, a vote for Scott Brown is the best bet for liberty - you know, the lesser of two evils fantasy.

Do I need to remind folks that Senator Brown is whining that the budget cuts sought by the likes of Michelle Bachman and others are "extreme".

Scott Brown is more Marsha Coakley than he is Ron Paul. In fact, Scott Brown is more Gloria Alred than he is Clint Bolick.

[fish]

Prettier than both as well!

[Tulpa]

I had no idea you were a fan of the public option in Obamacare v0.9

[Libertymike]

I voted for Kenedy.

[Libertymike]

In fact, you told me I threw away my vote, in so many words.

[Pro Libertate]

STOP. . .SPENDING. . SO. . .FUCKING. . .MUCH.

[Episiarch]

Spending? What is this "spending" you speak of?

[juris imprudent]

Kinetic Monetary Action - does that help?

[Bingo]

Isn't that what singles are for at titty bars?

[Pro Libertate]

I'm not sure, but it apparently involves stealing my money and doing something else with it. My wife thinks the government uses the money to fuel the Metro. I mean literally, by burning the money. She's from the area, so maybe she's on to something.

Me, I think they're building a space elevator out of dollar bills. But I'm an optimist.

[Episiarch]

I'll split the difference for you.

That seem about right?

[Pro Libertate]

It does. I used that image for a related Word of the Day.

[Episiarch]

I'd love to read Urkobold, ProL, but I just can't seem to see anything against the relentless black background. You might want to do something about that.

[rather]

waiting 🙁

[Pro Libertate]

You'll have to take that up with highnumber.

[modnar]

It's not spending, it's investments to win the future!

[Granny]

but I don't wanna eat dog food....

[Mrs. Pro Libertate]

NO!

[TheZeitgeist]

Faster the entropy goes, the faster the conflagration burns itself out so we can start the clean-up. From that perspective, I cheer the news...and am made hopeful by the cryptic statements from Treausury to account for their balance sheet problems.

I'm waiting when the weasel-markdown word 'goodwill' sneaks in their fool's financial lexicon? They obviously are picking up on Wall Street hardcore now with the 'one-time' financial events shtick.

[TheZeitgeist]

Ah, from Peter Schiff:

Most people are aware that foreign central banks figure very prominently into the mix. They buy for political reasons and to suppress the value of their currencies relative to the dollar. And while we think their rationale is silly, we do not dispute that they will continue to buy as long as they believe the policy serves their own national interests. When that will change is harder to determine. But another very large chunk of Treasuries go to "primary dealers," the very large financial institutions that are designated middle men for Treasury bonds. In a late February auction, these dealers took down 46% of the entire $29 billion issue of seven year bonds. While this is hardly remarkable, it is shocking what happened next.

According to analysis that appeared in Zero Hedge, nearly 53% of those bonds were then sold to the Federal Reserve on March 8, under the rubric of the Fed's quantitative easing plan. While it's certainly hard to determine the profits that were made on this two week trade, it's virtually impossible to imagine that the private banks lost money. What's more, knowing that the Fed was sure to make a bid, the profits were made essentially risk free. It's good to be on the government's short list.

Given that the Treasury is essentially selling its debt to the Fed, in a process that we would call debt monetization, some may wonder why it doesn't just cut out the middle man and sell directly. But the Treasury is prevented by law from doing this, so the private banks provide a vital fig leaf that disguises the underlying activity and makes it appear as if there is legitimate private demand for Treasury debt. But this is just an illusion, and a clumsy one to boot.

Mmmm...tasty End Times. Tasty.

[shrike]

Why did Schiff lose to the Wrasslin' Lady in the CT GOP primary?

[TheZeitgeist]

Same reason Wrassler lost to the decorated Vietnam Vet, and the same reason Chris Dodd once did and Joe Lieberman still does play Senator:

Connecticut voters make some very poor choices. No other way to account for such a political scorecard as that.

[Episiarch]

CT voters like to stick with what they know. They knew Blumenthal; had heard his bullshit for years. I knew he was going to win. He's a smarter, more controlled Eliot Spitzer. Jeebus help us all.

[TheZeitgeist]

Your Spitzer comparison is apt given the Connecticut Crusader's jihad against Craigslist as AG.

[Episiarch]

I have long noticed the similarity between the two, which leads me to hope that he suffers from the same...appetites...as Spitzer and gets nailed. But he's smarter and more circumspect.

[silent v]

The problem with Democracy is you get the government you deserve.

[Pro Libertate]

The problem with democracy is that other people get the government they deserve.

[Trespassers W]

The problem with Democracy is that some of the people get the government they deserve all the time, all of the people get the government they deserve some of the time, except for some of them... I forgot where I was going with this.

[JoshINHB]

The problem with democracy is that you get the government that other people want and deserve.

[no]

The problem with democracy is we don't own it, it owns us

[Rock Action]

If that's your argument against Schiff, then you're clearly not versed in CT politics. She lost because any Democrat was going to win the election. No Republican won election to any office of any import at both the state and federal level.

This is a deep blue state. And Epi's right. CT'ers hate change. They hate change so much, they don't even move their lips when they talk. The state, as George Will once pointed out, was founded because the Mass. Bay Colony was "too backsliding." It's a lethal combination of middle-class fear and Catholic/WASP ethics mixed with an almost unyielding belief in progressive politics.

[TheZeitgeist]

This is a deep blue state.

I gotta wonder then. If they're so damn blue in Connecticut how'd they end up with Lieberman...even now? I mean, he's a Kristolian Republitard of the first order. Speaks at their conventions, does weirdo religious shit like keep the lights off on Fridays, wants to bomb anything with sand in the local topography.

Liebertard hates anything cultural of any entertainment value. I knew his name long before a kid should know any Senator's name because that shriveled scrooge was trying to take my Mortal Kombat away way back when.

And even after his own party fires him in the primary, they elect that stupid fuck again. Just amazing the Connecticut body-politic must be. And I'm a guy who fashions myself a connoisseur of stupid electorates: I've lived in and witnessed the politics of Idaho and California over the past ten years... and CT still makes ME scratch my head. Just fucking bizarre.

[Rock Action]

BTW, that was a reply to shrike. I wasn't calling you out for your confusion. Threaded comments, man. You probably realize that, but just in case...

That said, I think I can answer your question: Lieberman's progressive economic policy preferences and his cultural puritanism (never underestimate a Nutmegger's capacity to frown upon any sort of deviance, save for queerness, used here in the PC sense of "queer") trumped his foreign policy record.

And Lieberman did win. And Lamont did beat him in the primary. But he won because the "conservative" D's, the independents (of which there are a lot, I think) and the R's voted for him in the general election. And there's also the religion thing, which is a significant demographic in CT, and it doesn't necessarily work against him like it might in other parts of the country.

[Rock Action]

Last tax day, I saw Schiff speak at a Tea Party rally (I was unimpressed with the TP crowd, frankly, but I felt good for going if only to be counted). At one point in his speech, he started calling for the abolishment of the federal income tax. Bad move. That is not gonna win any converts in CT. I walked away muttering, thinking of all the things you could say about the bailouts, spending, the administrative state...and you're calling for an end to the fed. income tax? That won't win you any elections around here.

[Rrabbit]

Another six months of spend spend spend waste waste waste waste closer to bankruptcy.

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