Lisa Reisman and I recently bylined a column for a forthcoming edition of a trade publication, Surplus Record, examining the current US budget deficit -- and what Obama or McCain might do about it if they make it to the oval office. Our research findings can, and should, scare you if you believe that a stronger dollar is important in the context of global sourcing and Spend Management -- we believe it is if you can't already tell. In the column, we write that "before 9/11/2001, we had nearly succeeded at paying down the debt thanks to record surpluses due in large part to a booming domestic economy (real Federal cost cutting was not in the vernacular then anymore than it is now). But following the horrible tragedies of that day, the US once again started down a path of uncontrolled government spending without a way to pay for it. Thanks to the cost of military action in the Middle East and Afghanistan -- not to mention slower increases in tax receipts due to a faltering economy on the home front -- the US once again fell into a spending free fall."
How bad is it? Try close to $10 trillion (or over $30K for every man, women and child in the US today). And it's only getting worse. The 2009 budget deficit will approach -- and possibly exceed -- $500 billion according to one study. As we look at this situation, "it's clear that our current President has been none too concerned about running up the deficit. There's a bit of irony in this given the current Federal focus on the cost of oil despite that the weakness in the dollar is what arguably plays the largest role in the current high cost per barrel (the rise and recent short-term decline of oil prices almost perfectly matches the rise and fall of the dollar when charted together)." For us, the only thing scarier than President Bush's spending policies are those that Obama or McCain might introduce. Where is a Spend Management deficit hawk when we need him/her most?
- Jason Busch