Budget Deficit Is Expected to Hit $1.5 Trillion
By COREY BOLES
WSJ
WASHINGTON—The Congressional Budget Office painted a grim picture of the federal government's finances Wednesday, saying the budget deficit would jump to nearly $1.5 trillion in the current fiscal year, largely because of a tax-cut extension enacted last year.
In its twice-annual forecast of the U.S. economy, the nonpartisan agency said the gross domestic product would grow 3.1% in 2011 but the jobless rate would remain stubbornly high for the foreseeable future. The new forecast compares with a $1.3 trillion deficit in fiscal 2010.
The CBO said the deficit, as a share of U.S. gross domestic product, would jump to 9.8% in fiscal 2011 from 8.9% in fiscal 2010. That would make the deficit the highest since the 10% mark recorded in fiscal 2009, which was the worst in 65 years. The agency said the deficit as a proportion of GDP would then decline to 7% in fiscal 2012.
The agency said the current unemployment rate of 9.4% would fall only marginally to 9.2% by the fourth quarter of 2011 and drop to 8.2% by the end of 2012. It won't revert to its "natural rate" of 5.3% until 2016, the CBO said.
(More here.)
WSJ
WASHINGTON—The Congressional Budget Office painted a grim picture of the federal government's finances Wednesday, saying the budget deficit would jump to nearly $1.5 trillion in the current fiscal year, largely because of a tax-cut extension enacted last year.
In its twice-annual forecast of the U.S. economy, the nonpartisan agency said the gross domestic product would grow 3.1% in 2011 but the jobless rate would remain stubbornly high for the foreseeable future. The new forecast compares with a $1.3 trillion deficit in fiscal 2010.
The CBO said the deficit, as a share of U.S. gross domestic product, would jump to 9.8% in fiscal 2011 from 8.9% in fiscal 2010. That would make the deficit the highest since the 10% mark recorded in fiscal 2009, which was the worst in 65 years. The agency said the deficit as a proportion of GDP would then decline to 7% in fiscal 2012.
The agency said the current unemployment rate of 9.4% would fall only marginally to 9.2% by the fourth quarter of 2011 and drop to 8.2% by the end of 2012. It won't revert to its "natural rate" of 5.3% until 2016, the CBO said.
(More here.)
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1 Comments:
This is horrible news on only one account - the deficit should be even larger. According to 'Professor' Paul Krugman, we haven't borrowed enough or spent enough by government, so we should really be ramping up our deficit to double-digit trillions and even more. We need to borrow more, spend more and incur even higher debts and increase deficits. There's no other way to get our fiscal house in order but to double, triple, quadruple and more our deficits and ramp up our debt to 100%, 200%, 500%, 1000% of GDP.
The only solution to our problems is simply more debt and higher deficits.
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