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Fifth Year of a Trillion-Dollar-Plus Federal Deficit

Written by Gary North on July 25, 2012

The politicians have gotten used to deficits over $1.2 trillion. They assume that the public — meaning Asian central bankers and the Federal Reserve — will continue to fund these deficits forever, at interest rates lower than at any time since the 1930s. The believe in free money.

But these IOUs are permanent. When rates climb, this debt will weigh heavily on economic growth.

It is already the third quarter of fiscal 2012. The deficit is above $1 trillion. The year ends on September 30.

We forget that fiscal 2008 was the first year in which the federal deficit was above $11 trillion. That was unthinkable in January 2008. It was reality by September.

Here are the numbers. On September 30, 2011, the federal debt (on budget — not Social Security and Medicare) was $14.8 trillion. On June 29, 2012, it was $15.8 trillion.

In fiscal 2007, according to the U.S. Treasury, the federal government’s debt increased $500,679,473,047.25. But that marked the last fiscal year in which the federal government’s debt did not increase by at least $1 trillion.

In fiscal 2008, the debt increased $1,017,071,524,650.01. In fiscal 2009, it increased $1,885,104,106,599.26. In fiscal 2010, it increased $1,651,794,027,380.04. And in fiscal 2011, it increased $1,228,717,297,665.36. . . .

At the close of business on Sept. 30, 2007–which marked the beginning of fiscal 2008–the total debt of the federal government stood at $9,007,653,372,262.48. At the close of business on July 19, it stood at $15,874,365,457,260.40–an increase of $6,866,712,084,997.92 in less than five years.

This is now unstoppable. Congress will not call a halt to it.

There will be a Great Default.

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4 thoughts on “Fifth Year of a Trillion-Dollar-Plus Federal Deficit

  1. Dr Parnassus says:

    This is insane on so many levels, I can't begin to even make a cogent comment.

  2. The Roman Empire used to have jubilees every 50 years, where the debt was simply written off because it was unpayable….like our national debt. Think of the biggest credit card in the universe with no spending limit, and the United States is making the minimum monthly payment on a stratospheric balance…which guarantees the principle will never be touched and all money spent will be eaten up in interest charges and junk fees. This is the endgame of all private central banking, the US is simply the latest in a long line of civilizations that have self-destructed the same way.

  3. As goes Rome,so go we all! This is what happens when Government tries to be all things to all people!

  4. Asians and fed reserve must believe in the 535, lets send them instead of tax payer money. The debt was run up by them. americans opposed the bail outs , obamacare etc… As far as im concerned if the federal reserve and asians are ignorant enough to keep buying the debt, they deserve to loose it just like the working american was scammed out of it. If the truth were know, it's all in politicians pockets anyway.