The U.S. dollar continues to weaken, which has led to commodity price increases, including a higher-than-fundamentals-dictate oil price of about $80 per barrel, and U.S. Treasury Department professionals are working long-and-hard to continue to refinance and rollover U.S. debt to finance the U.S. government's operations -- all because the budget deficit is high.

What could take pressure off all of the above? Well, in addition to letting the 2001 Bush income tax cut expire in 2011 as expected, Congress could pass a modest tax increase above the expiration amounts -- for example, increasing the top two income tax brackets by 2-4 percentage points.

One modest ray of light on the fiscal front for the United States: the U.S. Treasury, as expected, announced that total borrowing for the current quarter (October quarter) will be 43% lower, as a result of a reduction in money needed to help the U.S. Federal Reserve manage its balance sheet.

The Treasury said net borrowing will total $276 billion for October through December, compared to the previous estimate of $486 billion. The Treasury also projects a borrowing of $478 billion for the January-March quarter.

Can Congress balance the federal budget without a tax increase?

Indeed it is possible, but to do it Congress would have to undertake fiscal policy changes of Herculean proportions. Namely: radically changing Social Security's benefit for retirees, turn Medicaid over to the states, and implement other spending cuts.

One of the nation's foremost economic minds is sending an alarm signal regarding the U.S. budget deficit and national debt.

Former U.S. Federal Reserve Chairman Alan Greenspan said he's not "overly concerned" about the recent weakness in the U.S. dollar, Bloomberg News reported Thursday. However, Greenspan is concerned about the long-term costs to the United States associated with its rising national debt.

Is it time to rethink the U.S. job creation paradigm? It may very well be.

The Obama administration is said-to-be weighing whether to propose a corporate tax credit for new hires and extending unemployment insurance and Cobra benefits in light the nation's job creation drought, The Wall Street Journal reported(subscription required.)

What's one way to lower U.S. gasoline prices? Cut the U.S. budget deficit.

The two seemingly disparate conditions are, in fact, linked. A large deficit, such as the one the United States has been running for basically the past decade (and especially since the start of the financial crisis), weakens the dollar.

Notch another better-than-expected data point for the U.S. economy: the federal budget deficit totaled $111.4 billion in August, the U.S. Treasury Department announced Friday, Bloomberg News reported -- a level well below the $140.0 billion Bloomberg News survey estimate.

The August deficit brings the 2009 fiscal year deficit to about $1.37 trillion, largely ballooned by the $787 billion stimulus package to jump-start the U.S. economy and the $700 billion bank sector bail-out. There is one month left (September) in the current fiscal year. July's budget deficit was unrevised at $180.6 billion.

My Armenian cousin, Madeline, called me from France recently. (Madeline keeps me plugged into goings-in in Europe, economically-speaking, and otherwise.)

"Whats tort avec vous, les Américains? Votre système de soins de santé est en retard, inefficace, irrationnel!" Madeline said. ("What's wrong with you Americans? Your health care system is backward, inefficient, irrational!")

I agreed. The United States spends more per person on health care than any advanced, industrialized democracy, and it still has 47 million uninsured people.

Will entitlement reform and an increase in existing federal income taxes be enough to close the U.S. budget deficit (pdf)?

If the right conditions line up, perhaps, but former U.S. Federal Reserve Chairman Alan Greenspan suggests that ultimately the pressures on Medicare, Social Security, and Medicaid may be so great that the nation is compelled to add a new revenue source: a value-added tax.

U.S. Secretary of the Treasury Tim Geithner has pledged to China that the United States will re-double its efforts to cut the federal budget deficit.

Record deficits are pushing the nation's debt service capacity to its limits, and major U.S. debt holders China, Japan, and Saudi Arabia are becoming concerned about possible rising U.S. inflation and an even weaker dollar. The major powers' concerns are valid: U.S. investments, no matter how profitable, won't amount to nearly as much if the dollar's value is cut in half, again.

There has been a lot of chatter lately about the possibility of a second stimulus package for America, and now it has received the blessing of Warren Buffett.

On this morning's Good Morning America (on ABC), Buffett said, "I think that a second one [stimulus package] may well be called for ... you hope it doesn't get watered down in many ways." Buffett leveled criticism at the first stimulus bill, calling it "sort of like taking half a tablet of Viagra and having a bunch of candy mixed in."

There is a disturbing trend that is taking shape across the international financial markets. It involves primarily Russia, Brazil and China. Just what are these countries up to? They may be tipping the balance of international finance into uncharted waters.

Specifically, they are buying smaller quantities of U.S. treasuries and using their excess reserves to buy other non-dollar denominated assets. For example, in April total net purchases of long-term equities, notes and bonds rose a net $11.2 billion compared with a gain of $55.4 billion in March. International holdings increased $41.9 billion in April, compared with $55.3 billion in March.

A roundup of the dark tidings from BloggingStocks and elsewhere on the Web:

• CDS holders to push GM into bankruptcy despite salvage efforts? (Financial Times)
• Recession creates first April budget deficit since 1983 (BloggingStocks)
• Biofuels fall off a cliff, hard to find opportunity (Earth2Web)
• Georgia Gulf near bankruptcy (Zack's)
• More home owners unable to sell houses opt to rent them out (BloggingStocks)

So much for the April federal revenue bulge 'whisper number.' The U.S. government recorded its first budget deficit in April – historically one of the best months, if not the best federal revenue month of the year – since 1983, as the recession dragged down receipts.

The deficit totaled $20.9 billion in April, compared to a surplus of $159 billion April 2008, the U.S. Treasury Department announced Tuesday.

Economists surveyed by Bloomberg News had expected the April deficit to total $28.0 billion.

Chinese Premier Wen Jiabao's comments on Friday were blunt and pointed. In effect, the U.S. Treasury and the Federal Reserve absolutely must assure China on the safety of its investment in the United States. If we read between the lines, Mr. Wen told the U.S. that it must shore up its financial mess and that China will not stand for any more uncertainty in the U.S. banking sector.

The Chinese government is the largest holder of U.S. public debt. Officials in China are becoming increasingly concerned about the sharp increase in U.S. government spending. They worry it will lead to inflation and the collapse of the U.S. dollar.