Quote:I've seen show expenses for FY ending 2010 to 2019 being about 42 trillion, and about 35 trillion of that being covered. This is also known in accounting as "smoke and mirrors", since the GDP is in steep decline and there is no telling how far into decline we will go, nor how quickly we can turn that asymptote around and then how fast it will climb back up.You're right, there is no telling...
Quote:So, when the government says they are going to spend about 40 trillion over the next 10 years, I will assume they really meant about 60 or 75 trillion, and when they predict they can garner 35 million in revenue, I will assume they will get slightly less than that for the next 4 to five years. So, when they project a 7 to 8 trillion dollar deficit by 2019, I will assume they really mean 20 to 30 trillion.... but you feel secure assuming that estimates of long-run deficits will be off by a multiple of two or three? I'm not sure I understand your reasoning behind multiplying predicted government expenditures by over 150%. They might spend more than they say they will, but that would be a huge jump.
Quote:GDP will contract about 3.2 to 4 percent this year, and foreclosures will continue at the current rate at least for the next 8 to 10 months. Commodity prices and labor prices are falling which is actually causing deflation at this time.No argument there. The housing market is still fubar. Aside from fixing the banking system, Deflation is the urgent issue, which is why I'm with Krugman in wondering why people are getting worked up about hyperinflation when you currently have the opposite problem. The Fed can rein things in if inflation gets high, but they can't do anything if nominal interest rates are flatlined, yet prices are falling. Nobody should be hoping for another great depression, but that's what long-run deflation would mean.
I agree wholeheartedly with you that things are not rosy. Hard times are here, for quite some time to come. Where I disagree with you is in whether it will necessarily force the US government into massive inflation. The taxation powers of the US government are far from exhausted, and while nobody likes tax increases, a moderate tax hike combined with moderate inflation would be a much better solution to covering shortfalls than keeping taxes low, and printing tons of money. There is a political argument about whether a tax hike is popular enough to pass, but Obama will (in all likelihood) have a filibuster-proof Senate, so the government will have its options open.
-Jester
As for the link, I'm afraid my expertise and patience both run out long before the point where I'd be able to parse the importance of the differences between his measurements and the official ones. I'm not sure John Williams is exactly mainstream. He might be right, but he certainly has an idiosyncratic take on things.