The good news is that the budget deficit was down from last July, $52.79 billion vs. $69.16 billion. So, it looks like the full year’s budget deficit will be down from last year’s record of $412 billion; it may be down to $325 billion. This is due mainly to revenue increases. Of course, this good news does not offset the fact that we have paid $156.52 billion in interest on the debt; last year we had paid a little less than $140 billion at this point.
The bad news is that the trade deficit hit its highest level in four months, largely due to the rise in oil prices. This was not expected by the feds. Although the dollar has dropped 15% over the last three years, the trade deficit does not shrink as it should in classical economic thought. Another concern of the trade deficit is that some products we used to export, such as tvs and other electronic products, we no longer do. Autos seems to be going the same way; we import $16.4 billion and export only $6.2 billion.
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