This Just In: Government to Borrow More Than $500 Billion
November 3, 2008 by Miranda Marquit
Filed under Finance
We all knew that we would have to borrow more money to fund the $700 billion bailout (that will really cost around $2 trillion or $3 trillion). But it’s not pleasant to see the numbers out there in black and white. (Or red. Blood red. As the case may be.)
$550 billion
That’s how much the government says it is borrowing in this quarter in order to meet the gargantuan obligations it has given itself. The first quarter of next year, reports CNN Money, is expected to see another $368 billion in borrowing.
It doesn’t matter who wins tomorrow’s election: Higher taxes are inevitable
With all of this, it does not matter who wins the election tomorrow. Neither Barack Obama nor John McCain is likely to be able to keep pledges of lower taxes for the long term. Although the winner may wait until term #2 (if it happens) to raise taxes. At the very least, I’m not sure that tax cuts for anybody are feasible — even if taxes aren’t raised in the next 8 years.
It is also quite apparent that a number of campaign promises just aren’t going to happen. Programs that both John McCain and Barack Obama want are not very realistic right now. There’s just no money. And the money that the government keeps borrowing is being funneled to companies.
Geez…there are smart people around! I vote you for Fed chairman, or at least a member :-)
but really…i’ve always asked the question “where is all this money going to come from”….and we here there’s a proposition for another stimulus package, and i’m like, from what deposit account?
Thanks! *Grins at intellectual stroke* At any rate, the scary thing is that we’re at the point where money comes from nowhere. We keep saying we’re borrowing it. And we throw out numbers, but really, it’s just us saying it. There isn’t even PAPER money to cover the “wealth” circulating out there, and we were behind on having hard assets to back the paper money.
Bottom line: It’s all data and numbers and pulled out of nowhere. But as long as China and other creditors accept our I.O.U., then it works as currency (albeit inflated and expensive currency).
“There isn’t even PAPER money to cover the “wealth” circulating out there”- That is right on the money!
You know what’s funny, we’ve been told that these policies wouldn’t be monetized, and i’m like “yeah right!”, that’s the same way Mr. Paulson told us 6 months ago there wasn’t any housing crisis!
On the point of the Chinese IOU, i’m of the opinion that these guys would wake up soon enough and realize that they cant go on this way lending money to the US and having the US spend money like…..u know the rest!
i have a post on shorting US treasuries on my blog, it is related to this whole China burrowing craze. let me know if you’re interested
Yeah it is pretty crazy. And I’m heading over to check out your post :)
I doubt tax increases will be that noticeable. They’ll just keep on the road they’ve been on: devalue the dollar so they can pay their debts.
The CPI hasn’t been an accurate reflection of inflation for a long time (all sorts of govt manipulations make it next to worthless), and I’ve heard various experts estimate the real rate of inflation at anything from 10-15%. That was *before* they agreed to pump all this newly made money into the system.
Inflation is the hidden tax we’ll all pay, and as usual it’ll hurt the middle class most of all.
You probably have a good point. Especially about inflation. I’ve been worried about that as well. With so much “money” being put into the system, it seems inevitable that we’re going to end up with inflation issues.