THE federal budget has moved from surplus to a swelling deficit with astounding speed, but the markets have absorbed the shift with scarcely a murmur.
Indeed, Democrats are having a difficult time invoking the interest-rate argument because rates have declined sharply even as the budget has moved from surplus to deficit in the last two years.
Since the start of the Bush administration, the United States budget has moved from surplus back into deep deficit, with a shortfall of $300 billion to $400 billion expected for the fiscal year ending Sept. 30.
However, the bulk of Malawis agricultural exports are non-food crops (tobacco, tea, cotton), and there has only been a slight diversification away from these traditional exports in recent years (see Table 5) The balance on food trade alone has evolved rather differently, moving from a surplus in the late 1980s to a deficit in the 1990s.
Even so, his projections showed the current budget moving from deficit into surplus in 2009-10, allowing the rule to be met over the new economic cycle (see chart).The Treasury has been too optimistic in most of its fiscal forecasts since 2001, and this one seems no exception.
A federal budget that has moved from a surplus of 2.4% of GDP in 2000 to a deficit of 3.5% of GDP and rising.
When share prices started their plunge in 2001, the funds of FTSE 100 companies moved from overall surplus to a deficit of some £90 billion in 2003, according to Watson Wyatt, a firm of actuaries (see chart).
This was one reason for the volatile price situation in 1994; grain did not readily move from the surplus to the deficit areas.
That means moving from balance to a surplus of 2 percent of G.D.P. for the moderately indebted country, and from zero to 4 percent for the heavily indebted.
