Wednesday, January 26, 2011

CBO rains on Obama’s parade: $1.5 Trillion deficit for 2011

Last night Obama gave his second State of the Union address chock full of new “investment” [spending] ideas.  Today the CBO is raining all over that parade with some very sobering news.
For 2011, the Congressional Budget Office (CBO) projects that if current laws remain unchanged, the federal budget will show a deficit of close to $1.5 trillion, or 9.8 percent of GDP. The deficits in CBO's baseline projections drop markedly over the next few years as a share of output and average 3.1 percent of GDP from 2014 to 2021. Those projections, however, are based on the assumption that tax and spending policies unfold as specified in current law. Consequently, they understate the budget deficits that would occur if many policies currently in place were continued, rather than allowed to expire as scheduled under current law.
We hear it every day from both sides of the political spectrum that the current deficits we are running are unsustainable. This is why the spending freeze Obama announced last night seems so reckless and irresponsible.   

I have little doubt that this sobering bit of news from the CBO will not be heeded by the Obama administration.  As Nile Gardnier from The Telegraph puts it, [t]he Obama Presidency remains in a dangerous state of denial. God help us.


Via: Memeorandum

Via: Congressional Budget Office

Via: The Telegraph

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