Monday, July 13, 2009

Federal deficit hits $1 Trillion

Wow. Everybody saw this coming, but it's still shocking. I remember as a college student learning the national debt was $3 trillion, and in the mid 1990s federal deficits were being eliminated. In 1999 the US government announced a plan to reduce the national debt to $1.2 trillion by 2009. The national debt today is $11.5 trillion.

Budget deficit tops $1 trillion for first time

WASHINGTON (AP) — Nine months into the fiscal year, the federal deficit has topped $1 trillion for the first time.

The imbalance is intensifying fears about higher interest rates and inflation, and already pressuring the value of the dollar. There's also concern about trying to reverse the deficit — by reducing government spending or raising taxes — in the midst of a harsh recession.

The Treasury Department said Monday that the deficit in June totaled $94.3 billion, pushing the total since the budget year started in October to nearly $1.1 trillion.

The deficit has been propelled by the huge sum the government has spent to combat the recession and financial crisis, combined with a sharp decline in tax revenues. Paying for wars in Iraq and Afghanistan also is a major factor.'


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