While the U.S. economy is not growing at a rapid rate, it’s certainly not shrinking. So, in the span of one year, with some growth in the U.S. economy.
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New York, NY (PRWEB) November 20, 2012
Investment Contrarians, an e-letter of Lombardi Publishing Corporation, a 26-year-old consumer publisher that has served over one million customers in 141 countries, warns that in spite of a slowly improving U.S. economy, the 2012 U.S. deficit increased 22.4% year-over-year. Even as politicians talk about reining in the budget deficit, the evidence shows that spending continues to grow massively; something the U.S. cannot afford to let happen.
In a recent Investment Contrarians article, financial analyst Sasha Cekerevac noted that U.S. budget deficit numbers for October came in at a massive $120 billion. This compares to a budget deficit in October 2011 of “only” $98.0 billion; an increase of 22.4%.
“While the U.S. economy is not growing at a rapid rate, it’s certainly not shrinking. So, in the span of one year, with some growth in the U.S. economy, albeit slow growth, we’ve seen an approximate $20.0-billion monthly year-over-year increase in the budget deficit,” said Cekerevac.
According to the analyst, one indicator that points to U.S. economic growth is the increase in receipts. In October 2012, receipts increased 12.8% to $184 billion, from the $163 billion recorded in 2011. At the same time, the monthly expenditures for October 2012 came in at $304 billion, a huge 16.0% increase over the $262 billion recorded in the same month last year; causing the budget deficit to soar. (Source: U.S. Treasury Department.)
“While President Obama can talk about increasing taxes to generate more revenue, the truth of the matter is, the government is taking in higher levels of revenue. Incredibly, the spending side is growing at a far greater rate,” Cekerevac observed. The analyst doesn’t believe Obama’s tax hikes can 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. Politicians may talk about reining in the budget deficit, but the evidence clearly shows that spending continues to grow at a massive rate.”
According to Cekerevac, the fiscal 2012 year ended with another budget deficit in excess of $1.0 trillion. He stated that long-term budget deficits do not stimulate sustained economic growth. That has never worked, and never will. Cekerevac said that those who believe running a long-term budget deficit is crucial to building a stronger America need only look at the economic records of countries like Greece, Spain, and Italy.
At some point, the bill has to be paid. While no one wants to see the extreme cuts of the fiscal cliff enacted all at once, a gradual implementation of reduced spending could work without the same adverse effects, according to Cekerevac. He believes that either America chooses to rein in the budget deficit itself over the next couple of years, or the international markets will force us to do so.
He concluded, “Talk is cheap. The numbers don’t lie. Government spending is out of hand, and we are getting little in return. Politicians are just pandering to potential voters, and our children will be the ones to pay the price.”
Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more information on Lombardi Publishing Corporation, and to get its popular Investment Contrarians e-letter sent to you daily, visit http://www.investmentcontrarians.com. Or visit http://www.lombardipublishing.com/customer-service.html.