Emergency money not easily found with deficit trouble
The deficit soaring after the recession
Despite signs of an economic turnaround, emergency money is still hard to find in today’s economy. The federal budget deficit is at an all-time high and its enormous amount is a sign of just how hard-hitting the recession was. The Treasury Department released a total deficit of $91.85 billion for October, which is the largest ever on record. The Obama administration is projecting that by the end of 2010, the deficit will be even higher and should cap out at $1.5 trillion, which will be a 5.6% increase from last year.
The post-recession economy
The huge deficit is a result of the past year’s recession. Its severity is evident when looking on government revenues and the billions of dollars rechanneled into the economy in hopes to avoid complete financial annihilation. The government has been able to support the overwhelming financial situation with lowered interest rates, and the purpose of them is to spur on economic growth. There are precautions in the mix for consumers, though. Economists are warning that the government’s financing costs will start to rise quickly when true economic changes begin. The Fed will raise rates to control inflation and assure it won’t spin out of control. It will be a necessary move to continue leveling off the market.
Looking back on decisions
Legislators stand firm on their decision to put stimulus money into the system. They say that the money had to be spent to keep the country from sheer financial disaster. Though the recession was tough, it could have been much worse. Lately, the administration has committed to forcing the deficit to a controllable level once the economy begins growing again and the unemployment rate starts to level itself off.
The country’s deficit problems were made worse due to the recession. It was marked as the worse economic performance the US has had since The Depression of the 1940s. Individual income taxes are down, and that reflects how many people lost their jobs and corporate tax revenues declining. At the same time, the government was trying to help with emergency money, unemployment benefits, food stamps, and other public programs were in high demand. When all the numbers were in, the government assembled a $700 billion bailout fund for the nation and a $787 billion economic stimulus program.
The US financial future
The Treasury Department is projecting that over the next decade deficits will total about $9 trillion and will never fall below $739 billion in any one year throughout that time. Although the administration is committing to improving the deficit’s outlook, economists and financial analysts maintain that it will be difficult to turn things around. Karen Tunney, financial analyst, said, “The US has a long-standing history of a huge deficit that continues to grow. Turning it around is virtually impossible and even hampering it is a far-fetched idea.”
Moving forward into 2010
Moving forward, consumers are cautioned to be more aware than ever of their personal finances and managing them. The country is looking for emergency money, but it’s going to be increasingly difficult to muster due to the enormous deficit. Analysts are projecting the deficit will continue to grow and legislators are going to have a difficult time getting a handle on it.