Where is the Red Ink?

By Isaac Cohen*

Last week, the bipartisan Congressional Budget Office released its semiannual report, with downward revisions of its predictions about government funding and concluding that “at this point underlying financial conditions have improved.” In other words, there is good news on the issue of government financing.

The federal government is still spending more of what it is receiving, but the size of the difference, the deficit as it is called, or the amount of red ink in government accounts is smaller. For the current fiscal year ending on September 30, the Budget Office now projects a deficit of $506 billion, equivalent to 2.9 percent of the economy, less than the average of the last 40 years. Moreover, the expectation is that this declining trend will continue until 2018.

You wonder where are those who were saying that the United States was spending so much that there was a risk of a government default, as in Greece or Argentina. Also, some were saying that excessive government debt was generating an imminent risk of inflation. True, at the peak of the Great Recession, in 2009, the red ink in government accounts amounted to 10 percent of the economy. Now, it is less than 3 percent. Also, inflation is almost nonexistent. According to the Commerce Department, in July, consumer prices increased 1.6 percent, less than the central bank objective of 2 percent.

*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio. Former Director, UNECLAC.

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About Ramón Jiménez

Ramón Jiménez, actual Managing Editor de MetroLatinoUSA. Periodista que cubre eventos de las comunidades latinas en Washington D.C., Maryland y Virginia. Graduado de la Escuela de Periodismo de la Universidad del Distrito de Columbia. Galardonado en numerosas ocasiones por parte de la Asociación Nacional de Publicaciones Hispanas (NAHP) y otras organizaciones comunitarias y deportivas de la región metropolitana de esta capital. También premiado en dos ocasiones como Mejor Periodista del Año por la cobertura de la comunidad salvadoreña; premios otorgados por la Oficina de Asuntos Latinos del Alcalde de Washington (OLA) y otras organizaciones. Ha sido miembro del jurado calificador en diferentes concursos literarios, de belleza y talento en la región metropolitana. Ha visitado zonas de desastre en Nicaragua, Honduras y El Salvador e invitado a esos países por organizaciones que asisten a personas de escasos recursos económicos. Antes trabajó en otros medios de prensa de Virginia y Washington, D.C., incluyendo reportajes para una agencia noticiosa mundial.

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