Looks like under Obamas watch, markets/economy rallying.
- Thread starter KINGOFSHORTS
- Start date
Quote from Tsing Tao:
S+P down 40 points since this stupid post.
Mid year update on this prediction:
Hmm. That's funny. Not the pic, the unbacked assertion. I have the latest Treasury Excel with the figures in front of me right now, and it sums to a 398 bil deficit so far this year, down from 500bil at this time last year. So, on an absolute basis, not even relative to GDP, the deficit is coming down.
Actual figures:
2011:
Receipts: 777,643
Outlays: 1,278,486
Deficit: 500,844
2012:
Receipts: 827,754
Outlays: 1,225,878
Deficit: 398,124
Receipts up, outlays down.
Care to explain how you arrived at your conclusion? I'm open to the idea there may be a parlor trick in there, as I haven't researched it exhaustively; all I did was to just now take a quick look at the figures.
Actual source: http://www.fms.treas.gov/mts/index.html
I didn't hold any short. I wasn't short the S+P then, nor now. In fact, I provided you with what trades I had then - check those out now. For example, the one I mentioned above - had you followed then - would be up almost 20%. Your ASSumption then was wrong, and it is now.
But that's good - redirect your boneheaded comment by trying to make it look like I was holding on to some imaginary S+P short.
Yes, nice source. The problem with your source is that the "outlays" are not entirely inclusive of all "debt".
"The federal budget is calculated largely on a cash basis. That is, revenues and outlays are recognized when transactions are made. Therefore, the full long-term costs of entitlement programs such as Medicare, Social Security, and the federal portion of Medicaid are not reflected in the federal budget. By contrast, many businesses and some other national governments have adopted forms of accrual accounting, which recognizes obligations and revenues when they are incurred." - Wikipedia
In addition, "Debt", is not the difference between "receipts" and "outlays". It is the obligation to pay these future entitlements, etc as well. It is also not just "interest on debt" (outlays) but the full amount of debt outstanding that needs to be included. So when you talk about Debt to GDP, the Debt number to use is not the deficit. The deficit is only whether your included inflows are greater to your included outflows, and what that gap is. Has nothing to do with the overall debt issued (or continuing to be issued). What you are (conveniently) ignoring is continued issuance of debt.
And we haven't even gotten into the aspect that the GDP will be halved this year over last (estimate).
So you might want to work out those things in excel a bit more before you declare victory. So far, this year, it's a big FAIL in the US Debt to GDP ratio being better this year than last. But hey, look on the bright side! You still have 7 months left! Plenty of time for "parlor tricks".
http://www.usgovernmentspending.com/federal_debt_chart.html
You're right. All of what you wrote is correct, except for the bit about GDP being halved: growth in GDP is probably what you meant to write.
I went back and looked at what I originally wrote and realize that I wrote "debt" when I meant "deficit". That was a mistake.
So, the deficit is declining, at least if that source is correct, but as your source shows, the debt will continue to rise as a percent of GDP as the economy is just not growing strongly enough to pare that down.
I had meant to base the bet on the deficit declining as a percent of GDP which is why I cited that source. But there is no way I'd win a bet on debt declining as a percent; that would take a fifties or nineties economy, and there's no way we're getting that any time soon. If everything comes together perfectly, we might get it for all of a year, but that's it. Hardly something to bet on.
So I concede: you will win.