CBO Estimates Challenge Obama Agenda

[Damocles]

http://news.yahoo.com/s/nm/20090825/pl_nm/us_obama_budget

By Alister Bull and Andy Sullivan Alister Bull And Andy Sullivan – Tue Aug 25, 3:08 pm ET

WASHINGTON (Reuters) – The U.S. national debt will nearly double over the next 10 years, government forecasts showed on Tuesday, challenging President Barack Obama's economic and healthcare overhaul agenda.

The White House midsession budget forecast and the non-partisan Congressional Budget Office both forecast that government revenues will be crimped by a slow recovery from the worst recession since the 1930s Great Depression, while spending on retirement and medical benefits soars.

The White House projected a cumulative $9 trillion deficit between 2010 and 2019, while the CBO pegged the total at $7.1 trillion because it assumed higher revenues as tax cuts expire.

The spending blitz could push the national debt, now more than $11 trillion, to close to $20 trillion. The debt is the total sum the government owes, while the deficit is the yearly gap between revenues and spending.

"If anyone had any doubts that this burden on future generations is unsustainable, they're gone," said Senate Republican leader Mitch McConnell, adding that economic stimulus funds should be diverted to pay down U.S. debt.

More at link...

 

[FUCK THE POLICE]

And is diverting stimulus funds to pay down the deficit actually going to reduce the deficit in the long term? Or is the reduced economic growth that results going to reduce revenues so much that we end up with worse debt anyway?

We are not in normal economic times. There is no way to reduce the deficit besides truly massive cuts or massive tax raises that would do tremendous violence to the economy. The level of debt is horrendous, but comparable historical debt levels from other countries and the US show that it will still be at a point where we can bring it under control even if it does double by 2020. We will have a debt as a % of GDP of about 90%.

However, I'm a realist on this issue, not an optimist. If we venture far beyond that point there is a danger the debt could become unsustainable.

And my biggest problem isn't that he's saying "we're going to go to 2020 at that point our plan shows we'll balance the budget". He's just planning to run the deficit until then, and his successor will probably do the same. Personally, I think he should develop a plan to balance the budget by at least 2015, through any means necessary.

 

[FUCK THE POLICE]

If we don't ever develop a plan to balance the budget, and successive administrations just continue to predict deficits into oblivion, international investors will take notice, and our economy could become debt-intolerant. Which would lead to unsustainability far faster than what happened in WWII, because investors expected us to bring debt levels under control after the war was over.

 

[Damocles]

If we don't ever develop a plan to balance the budget, and successive administrations just continue to predict deficits into oblivion, international investors will take notice, and our economy could become debt-intolerant. Which would lead to unsustainability far faster than what happened in WWII, because investors expected us to bring debt levels under control after the war was over.

I agree with this. In good times we need to actually pay off some debt rather than making up budget "surplus" and then outspending it and still increasing debt.

 

[FUCK THE POLICE]

I agree with this. In good times we need to actually pay off some debt rather than making up budget "surplus" and then outspending it and still increasing debt.

I would honestly be glad with a Clinton deficit year after year. I would at least expect our economy to outgrow it, and so we wouldn't be in such dire straits.