The U.S. Treasury Department reported that the U.S. government had a surplus of $3.0 billion in January—the first surplus since September of 2012. (Source: Market Watch , February 13, 2013.) Let’s look into the “details” of this favorable report: For the current fiscal year 2013, which began in October 2012, the U.S. government has already raked in $290 billion in deficit, ballooning the national debt to $16.5 trillion. When the U.S. government incurs a deficit, it simply means it needs to borrow to pay its expenses. A one-month surplus of $3.0 billion doesn’t mean much—it’s more a timing issue between how much it borrowed in the past months, revenue in the current month, and expenses due for payment in the current month. The U.S. government has run a deficit of over $1.0 trillion in each of the past four years. For 2013, the Congressional Budget Office (CBO) expects the deficit to be $845 billion—less than a trillion-dollar budget, but it’s still going to increase the national debt well past $17.0 trillion. (Source: Congressional Budget Office, February 5, 2013.) And consider this: from now on, if the U.S. government continues to post a surplus of $3.0 billion a month and pays off national debt with the proceeds, it would take 458 years to pay off the national debt! As I have been stressing repeatedly in these pages, government spending is out of control and the national debt is way too high—almost unsustainable. How long can the Federal Reserve go on printing money to pay the U.S. government’s debt before the house of cards falls? I listened to President Obama’s State of the Union address on Tuesday night like millions of other Americans. I basically heard: “We need to do this, and we need to help these people, and we need to help this group…” But I didn’t hear him say, “We need to slash government spending to get our budget under control.” Yes, I heard, “We don’t need a bigger government; we need a more efficient one,” but I didn’t hear about cutting back on government spending that has ballooned the national debt by $6.0 trillion in just over four years. If we look at the deficit the government has incurred from October 1, 2012 to January 31, 2013, we get a number of $290 billion. At that rate, the deficit for the current fiscal year comes in just under $900 billion—and that’s if interest rates stay low and we don’t have another war or any natural disasters! And I have to wonder: how high would interest rates really be if the Federal Reserve weren’t buying the majority of Treasuries issued by the government? Scary thought. Where ... Read More