Budget Deficit Wider Than Expected in July

From Reuters via the New York Times courtesy of BuzzFlash:

The U.S. federal government ran a larger-than-expected budget deficit in July, bringing the year-to-date shortfall between receipts and spending to almost $400 billion, the Treasury Department said on Wednesday.

In its monthly budget report, the Treasury said the July deficit was $69.16 billion, based on revenues of $134.42 billion and spending of $203.58 billion. That was above the $61 billion shortfall Wall Street economists had expected and wider than July 2003's $54.24 billion deficit.

With only August and September left in the 2004 federal budget year, the red ink through the first 10 months totaled $395.78 billion. That's ahead of the revised record budget gap in 2003 of $374.27 billion.

The final 2004 gap is widely expected to set a new record topping $400 billion.

Click here for the rest.

From Merriam-Webster Online:

"def·i·cit...2 a : an excess of expenditure over revenue"

This is not to be confused with the national debt, which is the cumulative amount of money the government overspends plus interest.

The big problem with deficit spending is that, once the deficit reaches a particular percentage of the gross national product, that is, the total value of goods and services produced in a year (again from Merriam-Webster), the economy begins to suffer. The reason has to do with the money supply. The federal government doesn't just print up new money to spend, which would cause inflation; they borrow it, and get dibs. That leaves only a certain amount left for everyone else to borrow, for buying houses and cars, expanding and starting businesses, etc.

If the deficit is relatively low, it's not that big of a problem--there's still plenty of money left for everybody else. If the the deficit is big, however, the economy slows down, and businesses and people start to hurt. Enormous deficits destroy the economy. Then we're all screwed.

When Bush's massive tax cuts for the rich are combined with the ever increasing price tag for his pointless war making, all the variables are in play for the creation of enormous deficit spending. We're not quite there yet, but four more years of a monkey president will most certainly put us there, and the Republican Congress will most certainly react by placing important social services, like medicare and medicaid, on the chopping block: one way or the other, Bush's economic policies will kill innocent Americans.

Would it be over the top to compare him with bin Laden on this?

$$$$$$$$$$$$$$$$$$$$$$$$