As the Republican and Democratic leadership in Washington suit up for the battle that will be the 2012 budget, a battle that will have a lot to say about the fiscal fate of the U.S. government, we here at THE CONTRARIAN TAKE will be watching like a hawk. As a start, we thought we would have a look at the trends in U.S. government spending, deficits and debt. A homework assignment if you will ahead of this upcoming budget debate. Not only do we think this exercise will help frame the enormity of the fiscal issues Washington politicians face, but it should provide us with a pretty good tool with which to access, then track the impact of whatever spending, deficit or debt reduction initiatives might eventually emerge from this debate.
As we discussed HERE, we are not expecting much in the way of spending, deficit or debt reduction from Washington. For while it is true that there may finally be a budding realization in both political parties that the U.S. government's borrow and spend policies are unsustainable, that is a far cry from actually getting anything meaningfully done. Not only do we think their respective plans have much to be desired, but the political consensus required to push whatever good there is in those plans will be hard to muster. You see, the two sides are simply miles apart. Two very different spend and debt reduction plans drawn along party lines in a government where no one party is in charge says to us that nothing meaningful is about to get done.
Having said this, the fact is no one knows the future. And while we do have a bias, given the jekyll and hide nature of Washington politicians, now on steroids due to these increasingly stressful economic and geopolitical times, we think it's best to take these government fiscal issues one month at a time.
What follows is a bird's eye view of the U.S. government's fiscal plight. No projections or prognostications, just where the government stands today on some key financial metrics. As an intro, we must say the trends look horrible. Many years in the making, these trends took a decided turn for the worse during the administration of President George Bush II and have grown even more alarming under President Barrack Obama. Action by Washington to arrest these trends is a must have we think. But so far there is no disputing the fact that Washington has yet to act.
So without further ado, the metrics showing annual fiscals 1960 - 2010 and 12-month rolling totals 2000 - March 2011...
Regardless of which political party is in charge, government spending and deficits going in the wrong direction:
More charts and commentary continued at http://blogs.forbes.com/michaelpollaro/2011/04/22/us-governments-fiscal-plight-the-numbers-say-it-all/
