Like a thief in the night, the end of the 2012 fiscal year stole quietly to a bitter end on September 30, exceeding a trillion dollar deficit for the fourth year in a row.
While Federal income tax collections reached $2 trillion plus during that period, Federal Government revenue outlays exceeded $3.3 trillion, for a net loss estimated at over $1.3 trillion. This tops the annual gross domestic product of well over 90% of the world’s nations. And with the “fiscal cliff” still dangling over the edge of this nation’s financial precipice, there are no signs of improvement on the horizon.
As the upcoming presidential elections loom ever larger, with three critical debates in the offing, the newly-elected nation’s chief executive will have his hands full, improving even this outrageous four-year deficit disaster. The idea of a balanced budget in the foreseeable future is nothing short of fanciful.
Barring “revolutionary” changes in government agencies’ structure, and closing practically all income tax loopholes, with a flat tax to match government income with outgo will, at best, bring the next five years’ annual budget deficit to a range between $1 trillion and $500 billion.
The chance of even that happening are remote. Even a darker world scenario will back America’s decision makers into an irretrievable fiscal corner. With China no longer the super centrum of global gross domestic product revenue generation, a potential forthcoming global recession, encompassing the U.S., could be inevitable next year.
The announcement by Chicago Federal Reserve President Charles Evans that quantitative easing will remain the Federal Reserve’s ongoing stance until the U.S. economy shows solid signs of recovery, had the U.S. stock and commodity markets in rally mode today. With the anticipation of substantial currency expansion creating monetary liquidity, while enhancing banks’ lending power, the Federal Reserve hopes to boost U.S. spending power.
But all this will be for naught unless a new broom sweeps away the anti-growth policies that have become paramount in the business-strangulating policies that have proliferated in the last few years.
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