Budget Deficit Soars in October; Do You Trust the Politicians t..
The U.S. Treasury Department recently released the budget deficit numbers for October, reporting a massive $120 billion deficit. This compares to a budget deficit in October 2011 of “only” $98.0 billion. While the U.S. economy is not growing at a rapid rate, it’s certainly not shrinking. So in the span of one year, with some growth in the U.S. economy, albeit slow growth, we’ve seen an approximate $20.0-billion monthly year-over-year increase in the budget deficit. I think this shows the true ineptitude of our political leaders.
One sign that the U.S. economy has shown some improvement is that receipts increased to $184 billion, compared to $163 billion this time last year. However, expenditures increased at a much faster rate. The monthly expenditures for October 2012 were $304 billion, a huge jump from approximately $262 billion in October 2011, which caused the rise in the budget deficit. Does anyone know where this money went?
While President Obama can talk about increasing taxes to generate more revenue, the truth is that receipts to the government are increasing. The government is taking in higher levels of revenue, as the U.S. economy has slightly improved. However, the spending side is growing at a far greater rate. I don’t believe Obama’s tax hikes can pay for the massive increases in expenditures. More likely, raising taxes to try and reduce the budget deficit will kill what little growth the U.S. economy is experiencing.