Written by Charles Scaliger
In yet another sign that the looming American debt crisis is close to spiraling out of control, February’s monthly federal deficit was the highest ever recorded — $229 billion, according to a report released last Wednesday by the Congressional Budget Office. Even more alarmingly, five months into this fiscal year (which began October 1, 2011), the deficit has already exceeded half a trillion dollars, with the government having to borrow 42 cents of every dollar spent during that same span.
February also marks the 41st straight month that the federal government has run a deficit, another gloomy record (the previous record streak was 11 straight months).
President Obama’s proposed budget, released last month, envisioned annual budget deficits of $1 trillion for the rest of this decade — and these, we suppose, are wistfully optimistic figures, given current rates of government spending. With the debt-to-GDP ratio already north of 100 percent for only the second time in U.S. history (the first being the end of World War II), the United States is not far away from completely (for us) uncharted terrain.
At the moment, our debt-to-GDP ratio is about the same as that of Barbados and Ireland, and is exceeded only by Japan, Zimbabwe, Greece, Portugal, St. Kitts and Nevis, Italy, Jamaica, and Lebanon. Japan and Zimbabwe are the only two countries in the world whose debt-to-GDP ratio exceeds 200 percent. Greece, Portugal, Italy, and Iceland are already enduring significant hardship and will probably endure more as the eurozone continues to fray over the months ahead. The United States, thanks to the privileged status of the dollar as the world’s reserve currency, may prove more resilient, but eventually the piper will have to be paid.
If we continue to permit our political leaders to rack up obscene deficits (which then accrue to the national debt), that moment may come sooner than we expect.
Link:
http://thenewamerican.com/economy/commentary-mainmenu-43/11147-februarys-deficit-the-highest-ever
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