Remember, President Obama pledged to cut the budget deficit in half

From Goldseek.com

Earlier this year, and based upon the observation that his administration had inherited a $1.3 trillion budget deficit, President Obama pledged to cut the budget deficit in half. Mr. Obama also talked tough about reining in the deficit longer-term:

“We are paying the price for these deficits right now," Mr. Obama said, estimating the country spends $250 billion - one in every ten dollars of taxpayer money - in interest on the national debt. “I refuse to leave our children with a debt that they cannot repay.” CBS News

While none of Mr. Obama’s bailout/stimulus policies have been focused on budget deficit containment, this appeared to be changing last week when Obama called for budget cuts and pledged that his actions would "start setting a tone" in Washington. However, when the President unveiled that he was initially gunning for a mere $100 million in cuts it was difficult not to laugh. After all, and as Bloomberg recently noted, $100 million “would cut this year’s projected deficit by about 0.006 percent”. Since taking office the deficit has jumped by more than $500 billion, and President Obama feels it necessary to publicly state that he has asked his Cabinet chiefs to take the next 90-days to claw-out $100 million in cuts?

U.S. Treasury again increases auctions of 30-year bonds

From News.xinhuanet.com

The U.S. Treasury Department announced on Wednesday that the number of times it auctions 30-year bonds will be increased to 12 times a year in an effort to deal with the government's soaring debt.

This was the second time this year the Treasury decided to boost the number of auction times of 30-year bonds. Just three months ago, it doubled the frequency of the auctions from four times annually to eight.

At the same time, the Treasury said it will raise 71.0 billion dollars in a series of auctions next week to refund approximately 52.2 billion dollars of privately held securities maturing or called on May 15, 2009 and to raise approximately 18.8 billion dollars.

The upcoming refunding will include auctions of three-year and 10-year notes and the 30-year bonds, according to a statement by the Treasury.

The 71 billion dollars will be part of the government's total borrowing needs for the April-June quarter. The government will have to borrow 361 billion dollars in the second quarter, a record amount for the April-June period, the Treasury estimated on Monday.

It is the third consecutive quarter the government's borrowing needs have set records for those periods.

And the estimate for borrowing this current quarter was much larger than borrowing needs of just 13 billion dollars in the year-ago period.

During the July-September quarter, the government will need to borrow 515 billion dollars, down slightly from the year-earlier level of 530 billion dollars, the Treasury also estimated.

The government borrowed 481 billion dollars in the first quarter of this year.

The huge borrowing needs reflect the soaring costs of the government's economic stimulus package and financial rescue program, and the recession, which has resulted in a sharp decline in tax revenue.

The recession, which started in December 2007, also has boosted government spending for benefit programs such as unemployment insurance and food stamps.

The Obama administration is projecting the federal budget deficit to rise to 1.75 trillion dollars in fiscal year 2009, which ends on Sept. 30, 2009, from the previous record of 454.8 billion dollars set in fiscal year 2008.

To cover the government's borrowing needs, U.S. Congress boosted the limit for the national debt to 12.1 trillion dollars in February this year. The national debt now stands at 11.1 trillion dollars.

Record Deficits Expected in Q3

From Seekingalpha.com

The Treasury Department will need to borrow $361 billion in Q2, a record for the April-June quarter (see Investment News article), making for three straight quarters of record borrowing. The Treasury is also estimating it will need another $515 billion in Q3. The projected federal deficit for the year ending Sept. 30 will come to $1.75 trillion, another record, and quadruple the previous $454.8 billion deficit set last year - which was also a record. The national debt is currently at $11.1 trillion, but new limits will be raised to $12.1 trillion to account for the increased spending and borrowing.

The numbers are simply staggering, and make the recent proposal by the President to reduce the budget by $100 million seem to be just a drop in the bucket (see Washington Post article). In fact, regardless of your views on the $100 million, and spending cuts in general, a recent Youtube video gives you an idea of the size of the current budget, borrowing, and deficits, and shows you just how much (or little) $100 million amounts to (see YouTube video). Staggering indeed.

U.S. Treasury to Sell $71 Billion in Long-Term Debt

From Bloomberg.com

The Treasury plans to sell a record $71 billion in quarterly auctions of long-term debt next week as the government seeks to finance its unprecedented fiscal stimulus and financial rescue programs.

The amount was in line with the median forecast of analysts surveyed by Bloomberg News. Government debt managers also plan to boost the auctions of 30-year securities to once a month from the current schedule of eight times a year, a Treasury statement in Washington showed today.

Increased bond sales will help to lengthen the duration of federal debt outstanding at a time when long-term rates are historically low. That may help to hold down the government’s interest costs as it finances the record deficit.

Buffett Was Wrong About Our National Debt Problem

From Seekingalpha.com

Now, in a misguided Keynesian approach to solving the financial crisis (which is not unrelated to the problem of government overspending in the first place), Obama and the others are spending a trillion dollars MORE of money WE DON’T HAVE. Of course, this is not a Democrat or a Republican issue. Democrats like to spend money, Republicans like to cut taxes. BOTH are equally dangerous. No one will want to do it, but what this country needs is higher taxes, lower spending and a higher personal savings rate. How the hell are we gonna pull that one off??

I don’t think we will. And that is why I think Buffett was wrong. Washington, now more than ever, lacks the political will to correct this problem. And that is why we are doomed. Sadly, what will eventually happen is the government will have to print enormous sums of new money, causing hyperinflation and prohibitively high interest rates. What it cannot do, ironically, is choose to simply default on its mountain of debt as the Russians did in the 90s. This is because the vast majority of our debt is actually owed to ourselves, via Social Security and Medicare entitlements. What a freaking trainwreck.

Obama asks for ideas on curbing federal spending

From AP

Think you can do better than your federal boss? President Barack Obama wants to know how.

Obama on Saturday announced a plan for federal workers to propose ways to improve their agencies' and departments' budgets. The president said employees' ideas would be key as his Cabinet officials cut millions from the federal budget and trim the deficit.

"After all, Americans across the country know that the best ideas often come from workers, not just management," Obama said in his weekly radio and Internet address. "That's why we'll establish a process through which every government worker can submit their ideas for how their agency can save money and perform better. We'll put the suggestions that work into practice."

Can you believe we're only 6 months into the fiscal year and the nation is broke?

National Debt Day 2009

From Gather.com

April 26th marks National Debt Day, the day when our government runs out of operating money and starts borrowing to function. Can you believe we're only 6 months into the fiscal year and the nation is broke?

This is the earliest Debt Day on record, with most past debt days landing in July or August:

2002: Sept. 2

2003: July 29

2004: July 27

2005: Aug. 14

2006: Aug. 27

2007: Sept. 9

2008: Aug. 5

2009: April 26

The Obama (yes, AND Bush) Administration's stimulus funding, as well as layers of bailouts and corporate takeovers, have pushed the Debt Day to a record early date.

Families and households don't have the luxury of a debt day. We're forced to balance our budget every month or else we get bogged down in quicksand known as unsecured consumer debt. Our family should not have to balance our budget and still participate in this national fiasco. But we all do.

Right now each of us owes $35,000 to our national debt. The next generation will owe double that the minute they're born. Isn't it nice to know that the federal government is looking out for our best interests?

Happy Debt Day, fellow citizens!

Obama Calls for Return of 'PAYGO' Rule

From Foxnews.com

President Obama is looking to the past to help reduce growing federal budget deficits threatening the country's future.

In his weekly radio and Internet address Saturday, Obama called on Congress to pass a pay-as-you-go legislation, known as PAYGO, that would require new federal spending to be offset by budgetary cuts or tax hikes.

"We need to adhere to the basic principle that new tax or entitlement policies should be paid for," he said, asserting that PAYGO "helped transform large deficits into surpluses in the 1990s. Now we must restore that sense of fiscal discipline."

Fiscally conservative Democratic lawmakers, known as Blue Dogs, told Obama on Friday that they're working on a PAYGO plan and that they prefer to offset new spending with spending cuts elsewhere. Rep. Baron Hill of Indiana will introduce legislation next week, a Democratic aide told FOXNews.com

The federal deficit is projected to hit a record high of more than $1.8 trillion this year, due in large part to the government providing aid to Wall Street firms and other struggling companies, as well as Obama's $787 stimulus package. Pay-as-you-go legislation wouldn't affect that spending.

Dispelling myths about Tea Parties

From Dennews.com

Contrary to the popular perception of MSNBC, CNN and the liberal blogosphere, this was a true grassroots movement brought about by non-profit organizations using the Internet to spread the word and organize possibly 2,000 events attended by up to 1 million people. There was no official organization by the National Republican Committee, no origins in Fox News and nobody was protesting the fact that the Democrats hold the majority control of the government.

European Budget Deficits Fuel Concerns

From online.wsj.com

Government budget deficits in the European Union last year were larger than expected, fueling concerns among policy makers that state finances can't support more fiscal stimulus spending. The total government budget shortfall in the 27-nation bloc was 2.3% of gross domestic product last year, up from 0.8% in 2007, according to Eurostat, the EU's statistics agency.