Fisher Storms on the Horizon Part 7 of 18
For a brief time, with surpluses projected into the future as far as the eye could see, economists and policymakers alike began to contemplate a bucolic future in which interest payments would form an ever-declining share of federal outlays, a future where Treasury bonds and debt-ceiling legislation would become The Blade Forex Strategies dusty relics of a long-forgotten past. The Fed even had concerns about how open market operations would be conducted in a marketplace short of Treasury debt.
That utopian scenario did not last for long. Over the next seven years, federal spending grew at a 6.2 percent nominal annual rate while receipts grew at only 3.5 percent. Of course, certain areas of government, like national defense, had to spend more in the wake of 9/11. But nondefense discretionary spending actually rose 6.4 percent annually during this timeframe, outpacing the growth in total expenditures. Deficits soon returned, reaching an expected $410 billion for 2008a $600 billion swing from where we were just eight years ago. This $410 billion estimate, by the way, was made before Day Trading Freedom the recently passed farm bill and supplemental defense appropriation and without considering a proposed patch for the Alternative Minimum Taxall measures that will lead to a further ballooning of government deficits.
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