The federal budget

2014

With the release of the Presidents budget today you are going to hear a lot about federal deficits and debt. Following is the current state of the federal debt. Intra-governmental debt is debt owed to trust funds like Social a Security and Medicare.

The annual deficit which had declined a bit is essentially the difference between what the government collects in revenue and what it spends. The debt is the accumulation of all those deficits and it is increasing. As interest rates rise so will the total cost of borrowed debt.

The budget projects a $649 billion deficit this year. The shortfall is projected to shrink in each of the next three years to a low of $413 billion in 2018 before rising again. Wow, welcome news, a deficit that reaches a bit less than half a trillion dollars….before heading up again.

Rosy assumptions used by the White House are in conflict with the more somber projections by the Congressional Budget Office especially regarding growing debt in future years after the next few years.

On January 1, 2009, the federal debt was $10,627,961,295,930.67