Budget Deficit

You'll likely be hearing some cheerful news from the Bushies on the budget deficit. Don't believe it (don't believe anything they say). It's not true.

Here's the true story.

The short version is that the budget deficit is over $500 billion without including the "supplementary allocations" that time to time come up for the Iraq war. The reason the headline looks so good is because the social security trust fund is building huge reserves for the baby boomers. This was the plan years ago. But because we don't have a "lock box" the government continues to use those tax revenues for a "unified budget" deficit, making things look more rosey.

Here's another piece of wonderful news:

China's foreign exchange reserve had reached 1.43 trillion U.S. dollars by the end of September, up 45.1 percent year-on-year, the People's Bank of China announced on Friday.

A total of 367.3 billion U.S. dollars were added to the country's foreign exchange reserve in the first nine months of 2007, said the central bank.

In September alone, the forex reserve rose by 25 billion U.S. dollars.

China's soaring trade surplus is still the major contributing factor to the forex reserve boom

China owns an awful lot of America. Hope they don't do anything rash with it.