Chart below depicting where we are thru end July (and thru 2nd statement day of August).
We are on track to come out at about the usual $4.15T spending level that has been the norm for the last several years. Chart below depicting the longer term trend:
We should come out just above the $4T level with 2 more months left in the FY and Treasury spending running at about $300B per month.
Its good to see Bill using similar analysis of government spending recently wrt to Greece. Below is an image of a chart Bill recently created for a post in an analysis of Treasury spending in Greece. (Just ignore the red "% GDP" line it does not edify.)
In Bill's chart, you can see the post 2009 drop-off in Greece from the 125B level down to a more recent 85B level (2004/2005 levels!) where it seems to have stabilized for now, we'll have to see if it can stabilize there after the next "agreement" with the "institutions" is implemented, I don't think this level can hold if they attempt to meet the agreement.
This is pretty severe compared to what the trend has been here in the US as you can see from the chart immediately above, the US has stabilized at about the 4.1T level which is thankfully in excess of 1.5T ABOVE 2004/2005 levels.
(Could you imagine the chaos here in the US if the deranged shit-for-brains disgraced libertarian sub-human waste of flesh detestable morons got their way and government spending was cut back from the current 4.1T to 2.5T !!!! This is what Greece is going thru to give you an idea... oh brother....)
I would think that Bill's data does not include xfer payments it may just include the NIA framework's "G" component of government spending, but you still can get the idea as far as trend and relative values.
The picture Bill paints here wrt Greece (and the further analysis in his post) is probably indicative of what we would go thru fiscally if the detestable libertarians among us ever could pass a "balanced budget amendment" to the US.constitution similar to how the Greek people have been signing on to these "agreements" with the "institutions"...
Scary!
5 comments:
Yes, a Balanced Budget Amendment would be suicide, but I am absolutely certain that that is comning.
Doesn't understanding that flows in the economy must match pretty much rule out a balanced budget? (Dan Kervick's vision of a purely credit system aside)
The public intuitively understands and assumes they should earn more than they spend, ie be net positive, any given month, so since flows match, some other agent must be net negative.
Sure most people don't save in cash, they purchase other assets, so the deficit required to keep the public overall net positive doesn't need to be much.
The general public certainly does not understand, even a little bit, that flows in the economy must match. Everyone assumes the govt should run a surplus! (doesn't seem many economists understand it either. Europe can't seem to understand the everyone can't be an exporter..
An even more important question is,
If we end up with a balanced budget amendment, the economy will certainly tank. Is it more likely to get repealed, or will we turn into Europe?
And secondly, what's the chance Canada would also do such foolishness? If the US does it, will it be a global trend, despite the disaster of Europe?
Joe if you read Bill's post he goes over what happens but in the context of Greece signing up to these "agreements" rather than a US constitutional amendment but imo the analysis is about the same...
Thru Greece's 'agreements' they get the fiscal results and a constitutional amendment would be like US citizens would 'agree' among the people to implement a similar fiscal policy...
So if you read Bill's piece I think it also does a good job of illustrating what would happen to the US fiscal under a BBA....
rsp,
Canada will follow dutifully, but our trade deficits aren't as severe.
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