Why is this so difficult to understand?
Suppose I make my monthly budget, and assume I’m going to spend $600 for food.
At the end of the month, I discover that I only spent $520.
I expected to take $80 out of savings that I now do not have to. My bank account is now $80 higher than I expected it to be at the end of the month.
Is this difficult to understand? Apparently it is if you’re a financial journalist:
The White House, we are told, won’t be using about $200 billion of the $700 billion authorized under the Treasury’s Troubled Asset Relief Program, a lifeline for ailing banks. Instead it plans to use money never borrowed, never spent, that nonetheless increased the projected 2010 deficit, to narrow that projection of $1.4 trillion, according to a Congressional Budget Office estimate.
This un-borrowed, un-spent money qualifies as deficit reduction?
Yes. We expected a $1.4B deficit, it will only be $1.2B.
Next silly question.
For Asia’s emerging economies, Geithner’s high road entails strengthening “their social safety nets through sustainable health and retirement-benefit schemes, thus reducing the need for high precautionary saving that contributes to global imbalances.”
Uh, I think I’ll leave the rest of this to Bruce. Who knows better than to bother with resent Valuing only one future cash stream and pretending it’s the same as the current budget.
Ken, I’m sorry, but you are wrong and should/must know it. The deficit is a simple math equation of what comes in and what goes out. It definitely is not what comes and and what was expected/estimated to go out. That would be the estimated deficit.
So, no, they are not lowering the deficit!
I’ll agree that the article could have been written better. However, we’re not taking money from savings, are we? We’re running up the credit card. If I plan to charge $600 this month and only charge $520, I’ve still added to my total debt. I haven’t reduced a thing, have I? I merely borrowed less than I expected. This doesn’t count as deficit reduction. This isn’t hard to understand.
can’t seem to navigate to Bruce’s post.
but yes, misdirection is the coin of the realm. so much so that these folks brains cannot even find the rest of the story in the privacy of their own inner sanctum.
Read the quote closely:
“Instead it plans to use money never borrowed, never spent, that nonetheless increased the projected 2010 deficit, to narrow that projection of $1.4 trillion, according to a Congressional Budget Office estimate.
This un-borrowed, un-spent money qualifies as deficit reduction?”
No, it qualifies as deficit PROJECTION reduction.
Come on, this is just straight-forward reading.
anonymous and all
the trouble is that “deficit” these days means “projected deficit” almost every time it is used.
consider the great “44 (now 53) Trillion Dollar Unfunded Deficit!”