Record budget deficit forthcoming

Posted: 1st February 2010 by Scott @ The Right of a Nation in General Politics

Reuters is reporting that “the White House will predict a record budget deficit in the current fiscal year and more big shortfalls for the next decade in its upcoming budget proposal.”

Apparently it is predicted that there will be a record $1.6 TRILLION deficit for this fiscal year, with the deficits lowering some after that year and then continuing to grow towards the end of this new decade.

Also, the report says that Obama “will seek to strike a balance between reducing the deficit over the long term and stimulating the economy in the short term to ease the pain of double-digit unemployment.” So it looks like he is still of the belief, even after the ~$1 trillion spent in the stimulus, that you can “buy” legitimate and long-term jobs for people.

I’m no economist but it certainly seems to me that creating an environment that is economically fertile is the way to increase the need for jobs.  And that’s just the problem, the reason the stimulus hasn’t worked, and the reason people aren’t being hired is because of the fact that there is no legitimate need for workers right now.  The sole purpose of a business is to make money, not to provide jobs for people, regardless of what people believe (and proven by the failure of companies like GM who basically turned into healthcare/benefits providers).

You can’t just dump money into the economy in order to get people hired, just like you can’t rescue a fiscally irresponsible person in massive debt by giving them $10,000 cash.

  1. Just wanted to let you know that its not showing up properly on the BlackBerry Browser. Anyway, Im now on the RSS feed on my laptop, so thanks!

  2. Scott says:

    Hey, I appreciate the input. Anything in particular screwing up? I don’t have a Blackberry so I am trying to figure a way to simulate it. Thanks again.

  3. i was interested to know how you think an economically fertile environment can be made? What do you believe the government should do in this situation?

  4. Scott says:

    Well, I don’t think that continuing to increase spending and attempting to throw money at the problem will work.

    I think that the tax cuts that Bush implemented (many of which are set to expire soon) helped to create the fertile economic environment that I mentioned, although they were not enough to overcome the underlying problems with banks/loans/the housing market that were not fixed.

    Basically, I think that ending the practice of punishing success is what creates an economy that will grow and create the need for new jobs on its own. ex: things like reducing the capital gains tax.

  5. [...] all an outrage. In my recent post at The Right of a Nation – Record budget deficit forthcoming, I mentioned the importance of creating an “economically fertile” environment in order [...]

CommentLuv badge