Friday, January 16, 2009

Spending the Debt

The Congressional Budget Office announced last week that the federal deficit for 2009 would be $1.2 trillion-as a share of the economy, the largest since World War II. Responding to that staggering sum, President-elect Barack Obama warned that without decisive action, "trillion-dollar deficits will be a reality for years to come."How much is $1.2 trillion? To put the deficit in perspective, we thought of a few unrealities that carry a similar price tag: * For the sake of our children: 4.8 billion Nintendo Wiis.* What really does the body good: 300 billion gallons of milk.* Love thy neighbor: everything produced in Canada in one year.* Monopolize: purchase Exxon Mobil, General Electric, Microsoft and Wal-Mart.* IS our children learning?: fund the entire education system, Kindergarten through college, for one year.* Second time's a charm: pay for the entire War in Iraq twice over.* At the pump: free gasoline for all Americans for the next five years.* At the box office: one free movie ticket for every American, every single day.* I.O.U.'s: pay back all the money we owe to China and Japan.* Reverse the Ponzi: compensate all of Bernard Madoff's defrauded investors with a 2000% rate of return.A recent article in The Christian Science Monitor provides some additional spending scenarios. For example, according to CSM: "If the sum were calculated as a traditional 30-year fixed-rate mortgage, Uncle Sam would have to write a monthly check for $6.7 billion. That would be enough to pay the mortgage on about 10 percent of the nation's homes each month."PGPF's Manager of Research & Analysis Matthew Helm told CSM that "another way to view the $1.2 trillion deficit is in terms of citizens and households. It works out to $4,000 per citizen, or $10,000 per household.

"For more information: http://www.cbo.gov/ftpdocs/99xx/doc9958/01-08-Outlook_Testimony.pdfhttp://www.nytimes.com/2009/01/08/business/economy/08deficit.html?_r=1&scp=2&sq=deficit&st=csehttp://features.csmonitor.com/economyrebuild/2009/01/14/what-does-a-12-trillion-budget-deficit-look-like/

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