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.