[Thermodyne]

U.S. budget deficit put at $455 billion. This from an article published on the 16th. Income is down and expected to top out at 1.8 trillion. But, if the upturn continues, this is expected to rise to 2.6 trillion after the 4th quarter returns. It’s bad, but it has been worse in the past. You can bet that higher taxes will return, and cuts to services will be around the bend. It cost money to play war games for real.

A note on state budgets, many of the short falls were caused by the over-reliance on investment income. And many of the states hardest hit had spent this year’s money covering Last years bills, as they had done the prior three years. Paying Last years bills the day the new physical year starts does this. Sitting governors are often reluctant to force cuts; this is left until after the election. But by then the cycle is out of control. When you take this type of accounting and toss in a market that plummets, you have a disaster. There are a few states that chose to maintain their bond Ratings at the expense of the budget. My state is one of them. When the reserve fund value dropped off the chart, it was all in stocks and securities, general funds were added to maintain the value. This caused a tremendous hit on the budget. As did the return to physical accounting. We had a one party system here; the other party held only a few seats in the legislature. And as always happens, there was no one to say NO! So we spent away a fortune in tobacco money just because it was there. Problem is that now that it’s gone no one can seem to remember what we got for it.