WASHINGTON (AP) -- With the economy performing worse than hoped, revised White House figures point to deepening budget deficits, with the government borrowing almost 50 cents for every dollar it spends this year.It's the "structural imbalance" part that makes the current situation as hopeless as it is unsustainable. In the middle of a recession, who has $2 trillion lying around that they'll be able to lend Uncle Sam? The Chinese? Hardly. How about the Japanese? Nope, no money. How about OPEC? Russia? Yeah, right.
The deficit for the current budget year will rise by $89 billion to above $1.8 trillion -- about four times the record set just last year. The unprecedented red ink flows from the deep recession, the Wall Street bailout, the cost of President Barack Obama's economic stimulus bill, as well as a structural imbalance between what the government spends and what it takes in.
It's not just the $2 trillion this year that is literally unborrowable because it doesn't exist. It the $2 trillion next year as well, and the year after that. The only option is to print it out of nothing, either by domestic banks creating the money to buy debt, or by literally printing currency and spending it. I'm going to bet it's the former, not only because Uncle Sam doesn't like people using cash, but because $2 trillion is literally unmanageble*. It's 2 thousand billion, 2 million million, 2 thousand thousand thousand thousand dollar bills sitting around to be stolen**. It's impossible for the human mind to grasp how much money that is. Or how little it's likely to be worth.
Real nations don't do this, because countries that spend twice as much money as they take in are not countries for long. Oh, their borders might remain the same and maybe the country even keeps its name, like Mexico or Italy.
But everything else changes. And not in a good way.
* Plus, then the banks can collect taxpayer-funded interest in perpetuity for having the foresight to create money from nothing and lend it to the government.
** Which is, ironically, probably the most economically useful thing that could happen to them.