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U.S. Budget Deficit
How bad is the U.S. budget deficit?
It’s bad — but it’s been worse. The federal government quite often spends more than it collects in taxes: the U.S. has run a budget deficit in all but six years since 1940, according to the Congressional Budget Office.
To measure the deficit, economists compare it to the gross domestic product (GDP). President Obama’s 2009 budget calls for a deficit of $1.75 trillion, which would represent 12.3 percent of GDP, the highest percentage since World War II.
The real problem is that deficits add to the national debt, or the total amount our government owes. Interest and principal payments on that debt consume money that could otherwise be used to fund programs or cut your taxes. The total national debt today stands at almost $10.9 trillion, just over two-thirds of GDP.
Will the weight of that debt cripple the economy and markets? It’s possible but far from certain. In 1948 the national debt reached almost 100 percent of GDP — and stocks and the economy surged over the next decade.
Editor's Pick
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How Deficits Add Up
Just how much the U.S. owes, how we got here, and what this massive national debt means for you.
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Debt Watch
See how much the federal government owes borrowers, right down to the penny. Plus, look up 15 years worth of national debt levels.
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Is a Deficit Such a Bad Thing?
Bone up on the three major schools of thought about how budget deficits and the national debt affect the economy.
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Beyond the Big Number
Want to know exactly how the federal government plans to rack up a $1.75 trillion deficit this year? Read the president’s entire 2009 budget to see where the money will go.
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Is Obama’s Outlook Too Rosy?
President Obama has vowed to trim the budget deficit — once he blows it out first. But that promise assumes that the economy will recover soon, an assumption that not everyone agrees with.
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Ahead of the Bell: Budget Deficit
WASHINGTON (AP) — As Congress and the Obama administration grapple with soaring budget deficits, the imbalance for this year is on track to surpass $1 trillion for the third straight year.Economists surveyed by FactSet are projecting that the deficit for May will hit $155 billion. If that...
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US budget deficit move closer to $1 trillion mark
WASHINGTON (AP) — The federal budget deficit is nearing the $1 trillion mark for a third straight year, putting pressure on Congress and the Obama administration to come up with a plan to rein in government spending.The Treasury Department says the deficit through the first eight months of...
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Ahead of the Bell: Budget Deficit
WASHINGTON (AP) — The deal between President Barack Obama and Congress to cut $38.5 billion in federal spending won't prevent this year's budget deficit from being the largest in history.A Treasury Department report Tuesday is expected to show the deficit is still on pace to hit $1.5...
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US Debt and Deficit: In Focus
I was delighted to participate in a terrific segment with "CBS News With Katie Couric," (produced by the always-awesome, Guy Campanile) which focused on the US debt and deficit and why it matters to all of us. If you missed the interview that CBS News Correspondent Nancy Cordes conducted with the...
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VAT: Will the U.S. Adopt a Value-Added Tax?
To fix the deficit, higher income taxes alone won't do the trick. That's why a whole new type of tax - the VAT - is starting to get attention. by Cait Murphy
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What's Next for Taxes?
With tax rates low, federal budget deficits ballooning, and Congress showing no appetite for draconian spending cuts, something?s got to give. But who?s going to pay?As you file your tax forms this year, odds are that you?re not thinking, "Wow, I?ve really got it made!" While writing checks to...
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Taxes: How to Fix Our Broken System
One of Washington's foremost tax experts discusses why reform is so badly needed, why it's so hard to make it happen, and what might finally break the gridlock in Congress. by Cait Murphy
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Treasury Bonds: The Pimco Outlook
Mohamed El-Erian, one of the world?s leading bond investors, weighs in on the global government debt crisis, the outlook for interest rates and inflation, and the early line on Super Bowl XLV. by Lauren Young
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5 Economic Scenarios to Keep You Up at Night
Stagflation, more bank failures, crippling government debt ? these are just a few of the worst-case scenarios envisioned by several money managers and financial experts we consulted. While not all these experts see these chilling scenarios as likely, they remain a stark reminder of what could...
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What Are Interest Rates Telling Us? Part III
Link to Part I Link to Part II U.S. interest rates are exceedingly low these days, as we have seen in the last couple of posts. They are low in spite of the Treasury's selling enormous amounts of bonds to finance our budget deficits, which in the view of many observers make higher inflation...
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