The proposed Obama budget for 2010 calls for the Federal Government to spent in the range of $3.83 Trillion. This fact alone is bothersome but does not reach a real degree of concern until it is learned that the Federal income range for that same period will be only $2.38 Trillion. Simple mathematics declares that there will be a deficit of approximately $1.4 Trillion dollars.
Looking for comparisons, in 2008 Bush had a budget that was $1.1 Trillion less than this pending Obama budget with an over-spending of $249 Billion. In 2009 the budgeted amount stayed roughly the same as the year before but the shortfall reached $407 Billion. Obama, in one year, more than doubles the combined deficits of 2008 and 2009.
Who is going to be the source of this needed $1.4 Trillion? The answer may well be the worst aspect of Obama's fiscal efforts if the lender turns out to be Communist China via the purchase of US Treasuries.
As of the end of December 2009, America owed China $894.8 Billion. Granted this huge total is $44 Billion lower than the record high holdings by China in US Treasuries which was set six months ago. The current total debt of America to foreign nations is at $3.7 Trillion and after this fiscal year will be just over $5 Trillion regardless of the source of the advance. The obvious next concern is from where will this $5 Trillion payback originate. Choice number one is a drastic increase in Federal taxes; choice two is the socialization of segments of our economy; and choice three is a default on foreign debt. This default can be by straight non-payment or via a US mandated percentage reduction of debt by the foreign nation-holders of our Treasuries.
The obvious answer is to refocus on America; cut back on our international programs, including military actions; and grant our free society and free market system the opportunity to address and resolve the current economic troubles.
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