Tuesday, August 25, 2009

White House, Congress projects record deficits

From AP:

The federal government faces exploding deficits and mounting debt over the next decade, White House and congressional budget officials projected Tuesday in competing but similar economic forecasts.

Both the White House Office of Management and Budget and the nonpartisan Congressional Budget Office predicted the budget deficit this year would swell to nearly $1.6 trillion, a record, and far above the then-record 2008 budget deficit of $455 billion.

But while figures released by the White House foresee a cumulative $9 trillion deficit from 2010-2019, $2 trillion more than the administration estimated in May, congressional budget analysts put the 10-year figure at a lower $7.14 trillion...

...Beyond the 10-year forecast, the nation will face further challenges posed by rising health care costs and the aging of the population, the CBO said. "The budget remains on an unsustainable path" over the long-term and will require some combination of lower spending and higher tax revenues, it said.

Both forecasts see unemployment rising to 10 percent before falling and both suggest growth will return to the economy later this year but that recovery will be slow after the longest and deepest recession since the 1930s

Comment: This is no surprise to fiscal conservatives that have been sounding the alarm since Bush was in office. With the threat of government interventionist policies like Cap and Trade and a massive overhaul of the health care system, the private economy will have to carry a burden that may be so large that any real and sustained growth will be difficult. The article didn't mention anything about inflation which would be another thorn to knead its way into our economy.


Harrison said...

Bush doesn't get off the hook for his spending but, my god, Obama makes that look like child's play. It's like 32k for every person in the us now!

Rebecca @ Freaky Frugalite said...

:( We're doomed.

What can we do about this?? I don't see any way out. Maybe I'm being pessimistic... but I cannot see anything that would put a screeching stop to this madness.

Forgotten Liberty said...

Please, no one tell Obama what comes after a trillion!

The BoBo said...

This is so unsustainable it's not even funny. The private sector has no chance of saving the country unless those idiots up in D.C. start freezing spending and cutting a boatload of programs, departments, and get rid of all the damned perks our Congressmen enjoy at our expense. Government has become waaaay to big and this is absolute proof. When they're spending outpaces revenues - they've gone overboard.

Let's hope sanity reaches the government sometime soon.