You're a diligent investor. You find a compelling company in which to possibly invest and you begin studying it. But all of a sudden -- uh-oh -- it doesn't have any earnings! No net income, no price-to-earnings ratio... just a bottom line in red.
That's what you'll find in recent financial statements from the likes of AOL Time Warner
Sadly, a red bottom line is also what you'll find on the income statement for the United States of America -- if the U.S., in fact, had an income statement. The latest forecast from the Congressional Budget Office concerning our national deficit is not heartwarming: The federal budget deficit is now expected to hit $401 billion in 2003 and a record of nearly $500 billion in 2004. These stand in stark contrast to a record budget surplus of more than $200 billion in 2000.
There's a lot of blame being spread around. For starters, the economy hasn't exactly been helpful. But then, many argue that neither have President Bush's substantial tax cuts, especially at a time when we're spending some $4 billion per month in Iraq. As expected, Democrats and Republicans are not seeing eye to eye on the matter.
But believe it or not, things may well get worse. According to a New York Timesarticle (free registration required), "Federal budget deficits could total $5 trillion over the next 10 years if discretionary spending grows in line with the economy and if Congress enacts programs strongly supported by President Bush." The programs in question include Medicare reform ($400 billion), making current temporary tax cuts permanent ($1.5 trillion), and revising the Alternative Minimum Tax rules ($400).
The bright side, for those who seek one, is that forecasts don't necessarily come true -- though they're worth worrying about. After all, with massive deficits looming, the future of programs such as Social Security are somewhat less secure. We seek fiscal prudence on Wall Street; we should expect the same from Washington.
If you'd like to give someone a piece of your mind about our nation's bottom line, share your concerns with your elected representatives and with fellow Fools at our Current Events or Political Asylum discussion boards (we offer a painless, 30-day free trial to our vibrant board Community).