The budget deficit for February hit another all-time high record high. The federal government posted a monthly deficit of $223 billion, which was the largest monthly deficit in the history of the USA. It was the 29th consecutive month of red ink—another record. In fact, to put that $223 billion into perspective, the total deficit for the years 2006 and 2007 was $247.7 and $162.8 billion respectively. You read that correctly, we are now bleeding red ink on a monthly basis what it used to take an entire year to hemorrhage.
The Senate plans to vote today on competing proposals to cut spending, but Democrats have rejected GOP proposed cuts of more than $50 billion, and Republicans have ruled out Democrats’ cuts of less than $10 billion. The end result is that neither plan will draw the 60 votes needed to overcome a filibuster and pass. Therefore, even these paltry cuts—which aren’t enough to put a dent in the budget in the first place—will not be implemented. So it will be back to drawing board for both parties as they watch Rome burn.
According to the CBO, the government has already run up a $642 billion deficit for the first five months of fiscal 2011. And the interest on that debt continues to grow, reaching $101 billion through the end of February. That is a 12.5% increase over 2010, despite the fact that interest rates are still quiescent.
That’s why we need a third party that espouses two corner stone principles. One is to place the country back on a gold standard and the other is to pass a balanced budget amendment to the constitution. Of course that means we will suffer a severe but truncated recession or depression. But one is coming anyway so we should at least have it on our own terms. The longer we wait the more destrctive it will become.