Archive for Saturday, March 21, 2009

Auditors project deeper deficits for Obama budget

March 21, 2009

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— President Barack Obama’s budget would produce $9.3 trillion in deficits over the next decade, more than four times the deficits of Republican George W. Bush’s presidency, congressional auditors said Friday.

The new Congressional Budget Office figures offered a far more dire outlook for Obama’s budget than the new administration predicted just last month — a deficit $2.3 trillion worse. It’s a prospect even the president’s own budget director called unsustainable.

In his White House run, Obama assailed the economic policies of his predecessor, but the eye-popping deficit numbers threaten to swamp his ambitious agenda of overhauling health care, exploring new energy sources and enacting scores of domestic programs.

The dismal deficit figures, if they prove to be accurate, inevitably raise the prospect that Obama and his Democratic allies controlling Congress would have to consider raising taxes after the recession ends or else pare back his agenda.

By CBO’s calculation, Obama’s budget would generate deficits averaging almost $1 trillion a year of red ink over 2010-2019.

Worst of all, CBO says the deficit under Obama’s policies would never go below 4 percent of the size of the economy, figures that economists agree are unsustainable. By the end of the decade, the deficit would exceed 5 percent of gross domestic product, a dangerously high level.

White House budget chief Peter Orszag said that CBO’s long-range economic projections are more pessimistic than those of the White House, private economists and the Federal Reserve and that he remained confident that Obama’s budget, if enacted, would produce smaller deficits.

Even so, Orszag acknowledged that if the CBO projections prove accurate, Obama’s budget would produce deficits that could not be sustained.

“Deficits in the, let’s say, 5 percent of GDP range would lead to rising debt-to-GDP ratios that would ultimately not be sustainable,” Orszag told reporters.

Deficits so big put upward pressure on interest rates as the government offers more attractive interest rates to attract borrowers.

“I think deficits of 5 percent (of GDP) are unsupportable,” said economist Mark Zandi, chief economist at Moody’s Economy.com. “It will lead to higher interest rates to the point where it will force policymakers to make changes.”

Obama insisted on Friday that his agenda is still on track.

Comments

just_another_bozo_on_this_bus 6 years, 1 month ago

"President Barack Obama’s budget would produce $9.3 trillion in deficits over the next decade, more than four times the deficits of Republican George W. Bush’s presidency, congressional auditors said Friday."

Not a very accurate way to look at it. Most of the projected deficits will be run up by our finally having to pay for the Wall Street, banking and insurance pyramid schemes that flourished under BushCo, as well the ongoing tab for their love of hyper-militarism and wars of empire.

tin 6 years, 1 month ago

Wheres the next tea party? Count me IN.

Apparently libs don't care about the massive debt the messiah is racking up. They just defend it, and blame Bush. How ridiculous is that?

Godot 6 years, 1 month ago

For the full story, which, translated from the language of accountants, is "we are screwed." visit here often:

http://www.cbo.gov/

Godot 6 years, 1 month ago

Those who refuse to see this financial meltdown through the eyes of a prosecutor seeking to solve and punish crimes, and who continue to view this through petty partisan blinders, give aid and comfort to the crooks of every political persuasion who have wrought this upon us.

This is about an oligarchy of the Goldman Sachs/JP Morgans/Citi/AIG/HIG/Soros Fund/HSBC/Societe General/Deutsche Bank/ and hedge fund elites, not just about Democrats and Republicans.

This is not just a political game, though politics play a part because, through politics, comes power. This is the culmination of the greatest heist in history: a financial coup d'etat of the USA.

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