While the U.S. economy is not growing at a rapid rate, it’s certainly not shrinking.
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New York, NY (PRWEB) November 19, 2012
In a recent Investment Contrarians article, editor and financial expert Sasha Cekerevac reports that the U.S. Treasury Department recently released the budget deficit numbers for October, reporting a massive $120-billion deficit. He notes that this compares to a budget deficit in October 2011 of “only” $98.0 billion. (Source: “Budget deficit rises to $120 billion in October,” Reuters, November 13, 2012.) According to Cekerevac, government spending is growing at a far greater rate, despite the higher levels of revenue that the government is taking in, as the U.S. economy has slightly improved.
“While the U.S. economy is not growing at a rapid rate, it’s certainly not shrinking,” says Cekerevac. “One sign that the U.S. economy has shown some improvement is that receipts increased to $184 billion, compared to $163 billion this time last year.” (Source: Reuters.)
However, Cekerevac adds that expenditures increased at a much faster rate. He reports that the monthly expenditures for October 2012 were $304 billion, a huge jump from approximately $262 billion in October 2011, which caused the rise in the budget deficit. (Source: Reuters.)
“While President Obama can talk about increasing taxes to generate more revenue, the truth is that receipts to the government are increasing,” Cekerevac states, arguing that these tax hikes can’t pay for the massive increases in expenditures. “More likely, raising taxes to try and reduce the budget deficit will kill what little growth the U.S. economy is experiencing.”
The Investment Contrarians expert concedes that there are some specific times during a financial crisis within the U.S. economy when there can be some justification over the very short term to run a budget deficit to try to prevent a systematic collapse. However, he points out that this does not mean that the budget deficit should be continuously run for years on end to try to artificially inflate the U.S. economy.
“The U.S. economy cannot continue down the path of running a large budget deficit forever,” concludes Cekerevac. “At some point, someone has to pay the bill.”
To see the full article, and to get a real contrarian perspective on investing and the economy, visit Investment Contrarians at http://www.investmentcontrarians.com.
Investment Contrarians is a daily financial e-letter dedicated to helping investors make money by going against the “herd mentality.”
The editors of Investment Contrarians believe the stock market and the economy have been propped up since 2009 by artificially low interest rates, never-ending government borrowing, and an unprecedented expansion of our money supply. The “official” unemployment numbers do not reflect people who have given up looking for work, and are thus skewed. They believe the “official” inflation numbers are also not reflective of today’s reality of rising prices.
After a 25- to 30-year down cycle in interest rates, the Investment Contrarians editors expect rapid inflation caused by huge government debt and money printing will eventually start us on a new cycle of rising interest rates.
Investment Contrarians provides unbiased research. They are independent analysts who love to research and comment on the economy and investing. The e-newsletter’s parent company, Lombardi Publishing Corporation, has been in business since 1986. Combined, their economists and analysts have over 100 years of investment experience.
Find out where Investment Contrarians editors see the risks and opportunities for investors in 2012 at http://www.investmentcontrarians.com.
George Leong, B. Comm., one of the lead editorial contributors at Investment Contrarians, has just released, “A Problem 23 Times Bigger Than Greece,” a breakthrough video where George details the risk of an economy set to implode that is 23 times bigger than Greece’s economy! To see the video, visit http://www.investmentcontrarians.com/press.