The federal budget year ended in October. The October deficit number set a record of $176.4 billion, which was higher than the $150 billion economists had predicted.
For the budget year 2009, the deficit reached $1.42 trillion. That too was an all-time record. This year's deficit was $958 billion above the 2008 deficit. October was the 13th straight month to show a deficit.
The Obama administration expects this year's deficit to reach $1.5 trillion.
Lower receipts of individual and corporate taxes accounted for most of the imbalance. Receipts were down 17.9% from last October to $135.3 billion. Spending fell 2.7% to $311.7 billion.
In relation to the overall economy, the 2009 deficit was 9.9% of GDP. That was the highest level since World War II when it hit 21.5% of GDP in 1945.
Projections for 2011 are for a deficit in excess of $1 trillion. Estimates are that the deficit will not fall below $739 billion over the next decade.
As you already know, a large chunk of the deficit comes from the bank bailout of $700 billion and the stimulus package of $787 billion. What is not included in these figures is the $11.2 trillion pledged by the Federal Reserve to bail out the bankers and the financial industry. Actually the $787 billion in the stimulus package is a pittance compared to the Fed's spending package of $11.2 trillion. The public has not been made aware of the details of the Fed's expenditures.
Should the Federal Reserve make its expenditures public?
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