U.S. Government Finances Deteriorating Rapidly

Montreal, Canada
May 13 2002:

The U.S. Federal government finances are deteriorating at an alarming rate, according to the respected, Montreal based, Bank Credit Analyst.

The research team points to, what it describes as, 'a feeding frenzy of spending plans taking place in Congress'.

Worse, they say, "total revenues are dropping, largely because individual income tax revenues have plunged by about $100 billion, compared to a year ago."

Analysts, they say, cannot explain the depth of the revenue shortfall, especially since the economy experienced a very mild recession.

BCA says the CBO is soon expected to boost its estimate of the 2002 fiscal year unified budget deficit, from $46 billion to nearly $100 billion.

The fear, they say, is that the U.S. could be slipping back into a sustained period of budget deficits, which would push up real interest rates on U.S. Treasuries, as occurred in the 1980s and early 1990s.