Long-Term Deficit: $9 Trillion
August 27th, 2009We have some bad financial news, and some really bad news to report.
Total Deficit or Surplus (Percentage of GDP):
The bad news is that a mid-year review from the Office of Management and Budget (OMB) estimates that the 2009 U.S. federal deficit will be $1.58 trillion, which is $262 billion less than predicted earlier in the year. The Obama administration says this is because it is providing less financial aid than expected to Wall Street.
Unfortunately, the really bad news is the 10-year deficit projection rose to $9 trillion, while the Congressional Budget Office estimated the 10-year deficit at $7.1 trillion. The $9 trillion figure represents three-quarters the size of the entire national economy. Either way, our country is plunging deep into debt.
The discrepancy between the two estimates demonstrates how difficult it is to predict something the size and complexity of the U.S. economy. What’s really scary is that the margin-of-error of these estimates is at least $2 trillion.
"Whatever their cause, the administration is very concerned about these out-year deficits, and getting those deficits under control is a top priority of the administration," said budget director Peter Orszag.
The OMB report warned that rising health care costs and entitlement programs will continue to strain the federal budget and add to our $11.7 trillion national debt. This could hamper overall economic growth in a self-reinforcing downward spiral. The CBO said the long-term picture poses a “threat to the economy.”
Meanwhile, Congress is on summer vacation, dreaming up new ways to bankrupt our country.
