Difference between revisions of "The Increase of the United States Budget Deficit"
Jump to navigation
Jump to search
| Line 7: | Line 7: | ||
* High spending - Foreign policy, war<br> | * High spending - Foreign policy, war<br> | ||
* Tax Cuts<br> | * Tax Cuts<br> | ||
* Low interest rate lending from foreign Central Banks Bretton Woods 2<br> | * Low interest rate lending from foreign Central Banks - Bretton Woods 2 System<br> | ||
* Growth of Chinese Economy<br> | * Growth of Chinese Economy<br> | ||
* Increase in U.S. domestic demand<br> | * Increase in U.S. domestic demand<br> | ||
Revision as of 20:24, 13 September 2005
Description:
The FY 2004 U.S. fiscal deficit has grown to $670 Billion. This marks the third yearly increase of the deficit. The deficit, combined with other economical events, could act as a driver to cause a hard landing of the U.S. economy.
Enablers:
- Low savings rate
- High spending - Foreign policy, war
- Tax Cuts
- Low interest rate lending from foreign Central Banks - Bretton Woods 2 System
- Growth of Chinese Economy
- Increase in U.S. domestic demand
Inhibitors:
- Scale of foreign financing required exceeds foreign central bank's willingness to lend
- Asian banks share more of the financing burden
- Inflation in China weakens financial power
- U.S. changes policy to reduce deficit
Paradigms:
Experts:
- Nouriel Roubini
- Brad Setser
Timing:
Sytem will not hold at current rate in the next five years.