By Jim Kouri
The U.S. Treasury Department announced that the Obama Administration will borrow at least $644 billion from the market to fund government programs and operations during the first six months of 2012, according to a statement released on Tuesday.
In spite of President Barack Obama’s campaign putting a positive spin on conditions within the U.S. economy, this latest news is one more indication of a troubled country keeping its head above water, states economist George Leckster of Southwestern University.
“During the January-March 2012 quarter, Treasury expects to issue 444 billion dollars in net marketable debt, assuming an end- of-March cash balance of 30 billion dollars. This borrowing estimate is 97 billion dollars lower than announced in October 2011,” the Treasury said in a statement.
The Treasury forecasts that 200 billion dollars will be issued in net marketable debt during the April-June quarter this year, assuming an end-of-June cash balance of 90 billion dollars, noted the statement.
“Once again, the Obama White House and the U.S. Congress will be increasing Americans’ debt. And instead of cutting government agencies’ budgets, there are already signs of unplanned increases from such programs as Obamacare and the next round of ‘bailouts’ for homeowners unable to afford their homes,” said political strategist Mike Baker.
“This is almost like the ‘mother of all Ponzi schemes’,” Baker quipped.
U.S. federal budget deficit hit almost 1.3 trillion dollars in fiscal year 2011 ending in September 2011. The red ink of the federal government budget reached the historic high level of 1.41 trillion dollars in fiscal year 2009 to fight the financial crisis, according to the Treasury Department.
“During the October-December 2011 quarter, Treasury issued 310 billion dollars in net marketable debt, and ended the quarter with a cash balance of 86 billion dollars,” the statement indicated.
Because of the ongoing financial crisis and shrinking revenue, borrowings by the Obama government surged over the past three years and the trend is expected to continue this year, according to experts. While the Obama Administration and re-election campaign bombard the media with statements blaming the Bush Administration, the three year period in the Treasury Department’s statement were clearly during the Obama presidency.
Some experts believed the U.S. economy could outperform most advanced economies in the Euro area, but the unsustainable federal budgetary trajectory and still weak labor market caused uncertainties for business investment and household consumption.
The U.S. economy was facing a string of challenges, including the slowdown in growth overseas, particularly in Europe, and the threat of further fiscal contraction at all levels of the U.S. government, Janice Eberly, Assistant Treasury Secretary for Economic Policy, said in a separate statement released Monday.
“At this critical juncture, we need to remain consistent in our support for the recovery,” stressed Eberly.