The US Daily Surplus for 1/14/2013 was $7.3B bringing the total January 2013 deficit to $40B through 14 days. All in all, we are pretty much in line with last year when we ended up with a $53B January deficit, followed by a $249B February deficit. The “debt limit cushion” has grown to $50B, still pointing at 2/1 as the imminent default date using last year as a guide, which unfortunately isn’t particularly useful anymore due to the delay in tax filings. In any case, it looks like we have about a month, and the debt ceiling rhetoric is really heating up. Obama says he won’t even negotiate, and some are saying Republicans are willing to shut down the government. I’m pretty sure the Republicans will back down on this one, but you never know what a wounded animal will do. Default now, or default later? Does it really matter? In the long run, not so much, but in the short run, pulling out an annualized $1.2T of deficit spending out of the economy would pretty much send the economy into a “for real” great depression right here, right now. And that’s the scary part…like a drug addict, our economy has become addicted to all of this false demand created by deficit spending. Cutting spending kills the economy, but spending can’t continue forever anyway. It’s a lose-lose…my advice…just enjoy it while it lasts.
