Submitted by Joseph Carson, Former Director of Global Economic Research, Alliance Bernstein.
Federal budget deficits need to be analyzed nowadays in the context of how much it is propping up the economic growth cycle because after a decade of record federal deficits the current business cycle would ran out of gas without ongoing federal borrowing to support public and private sector spending and activities.
The current decade-long business cycle has received unprecedented support from the federal government. For example, in the last 10 years the federal budget deficit averaged $830 billion per year, and the cumulative deficits of the past decade have exceeded the budget deficits in the previous 50 years combined by nearly $2 trillion.
Measured in relation to the Gross Domestic Product (GDP), the annual budget deficit in the past decade averaged 4.8%. That’s the first time in the post war period that during an economic growth cycle the scale of the budget deficit exceeded the annual growth (4%) of nominal GDP.
http://www.zerohedge.com/markets/decade-record-deficits-has-led-mutant-business-cycle?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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