U.S. budget deficit "out of control"

[el freako]

Originally posted by DanS
In 2003, we will run a deficit of 4% or 4.5%

Slightly creative accounting by you here DanS, the average deficit in the first three quarters was 4.8% of GDP (and the deficit in Q3 is 5.4%).
So are you really expecting the deficit to halve in the fourth quarter?.
I think that a deficit of around 5% is far more likely for both the fourth quarter and the year.

Originally posted by DanS
...and will have economic growth of 3%. Germany and France will run deficits of 3.5% or 4% and have no economic growth to show for it.

Well there is also the matter of differing ways of measuring growth - the hedonic deflator add's 0.5% to the US's growth (although France uses this as well) , the inclusion of software purchases add's another 0.1% and the difference in population growth is around 1%.

A truer picture would be obtained by looking at the structural deficits and the trend rates of growth per head (adjusted for the differences in measurement I mentioned above)

Using OECD and IMF data (but not the IMF forecast for the US budget defict that we both think is excessive) here is the structural deficit and per capita trend growth the US and some countries in europe: (the figures are show only to the nearest 0.25% to reflect the inherent inaccuracies of estimating this data)

United States:
Trend growth per head: 2%
Structural Budget Deficit: 4.5%

Germany:
Trend growth per head: 2%
Structural Budget Deficit: 2.75%

France:
Trend growth per head: 2%
Structural Budget Deficit: 3.25%

Britian:
Trend growth per head: 2.75%
Structural Budget Deficit: 1.75%

EU15:
Trend growth per head: 2.25%
Structural Budget Deficit: 1.5%

[Ted Striker]

there are 2 wars going on

duh

[MikeH]

Yes Ted, but:

Originally posted by Case

However, what's got the analysts freaking out is that their models are showing the deficits continuing even when good economic times and an end to the war are factored in. (see The Economist for the week of November 8-14 - their estimates show the deficit likely to steadily increase over the next decade)

[Q Classic]

i'm sure most of the older people here don't have to worry about the deficit exploding on them. i mean, after all, by the time things get really bad, they'll be in retirement homes cashing in their 401(k)s, while us young'uns will be the ones stuck with the ****ing huge bill.

so **** all y'all old people.

and i say that in the nicest possible way.

[el freako]

Originally posted by Ted Striker
there are 2 wars going on

Well as I said defence spending has only increased by 1% of GDP, and probably only half of that is due to the wars.

As the deterioration in the US's structural budget balance (i.e. that which would happen if the economy was running at it's trend) is over 5% of GDP then between a fifth and a tenth of the deficit is caused by the wars.

Originally posted by Ted Striker
duh

Well as I showed above - a little knowledge is a dangerous thing

[Drake Tungsten]

The new Medicare plan that should pass soon isn't going to help the budget situation out any...

I think I might just stay overseas until the baby boomers all die off.

[Alexander's Horse]

Wars are expensive. The UN was a much cheaper option.

[Q Classic]

old people are expensive, too.

damn crotchety old fogies, feeding off of us productive young people like ancient vampires...

[DanS]

A truer picture

Comparing per capita GDP growth create does not create a truer picture when we are comparing budget deficits.

Slightly creative accounting by you here DanS, the average deficit in the first three quarters was 4.8% of GDP (and the deficit in Q3 is 5.4%).

Yeh, and 3rd quarter GDP growth was 8.2% at an annual rate, which might bump up our full year growth number from 3%. Point being that deficits shouldn't be looked at in a vacuum.

[Sava]

for the people blaming the deficit on war:

1. Bush's tax cut is 4 times larger than all the money being spent in Iraq AND 9-11 related costs.

2. During times of past wars, while we were running deficits, the top marginal tax rate was up around 90%. It's fine with me if you want to return to that tax plan.

[DAVOUT]

Originally posted by Q Cubed
old people are expensive, too.

damn crotchety old fogies, feeding off of us productive young people like ancient vampires...

Do not forget that, in their attempt to starve you, old people will be assisted by holders of the US foreign debt (mainly Chinese, Japanese, Arabs and probably drug lords) who will receive every year of your life enormous amount of interests.

[Q Classic]

all 'cause of those damn old people.

[Menlas]

Originally posted by Q Cubed
all 'cause of those damn old people.

Yeah, I'm glad our scientists found an answer this summer, with the heatwave in France. Hopefully, this should be even worse next year, they are working on it.

[JohnT]

Originally posted by KrazyHorse


So is ours, and has been for 6 years straight.

congratulations on making the 2,510,000th post on Apolyton, KrazyHorse. I wonder who was post 2.5 million? Anyway, back to the bickering...

And you are proud that your government is overtaxing the citizenry? While $250,000,000,000 deficits are nothing to be proud about, allowing my government to steal more from my pocket then even they can spend is just as sad.

[MikeH]

You Americans have always had a problem with being taxed. If you'd just enjoy it like good Europeans we wouldn't have had to have that silly revolution and you could still be nice respectable Brits.