US budget deficit to reach $500 billion
dog77_1999 @ Mon Feb 04, 2008 11:34 pm
http://www.reuters.com/article/topNe...47547520080204
$1:
WASHINGTON (Reuters) - U.S. budget deficits in the next few years will likely exceed the near-record gaps forecast in the White House budget proposal issued on Monday, which assumes much stronger economic growth than most economists expect and excludes crucial Iraq war funding and tax changes.
Economists say the White House forecast of 2.7 percent economic growth in 2008, which was released in November but which underlies the deficit projections, is too rosy given deteriorating conditions since then -- meaning near-term tax revenues are likely to disappoint as well.
"The odds are that the economy will grow less than the administration projects in 2008 and 2009, and that the deficits will be significantly larger than they project for a number of years," said Douglas Elmendorf, an economist at the Brookings Institution in Washington.
The nonpartisan Congressional Budget Office estimates growth this year at a paltry 1.7 percent, while the Blue Chip survey of private economists in January showed a consensus of 2.2 percent growth -- a projection likely to be marked down when the next survey is released on February 10.
President George W. Bush's final budget blueprint sees the deficit more than doubling in the current fiscal year to $410 billion, due partly to an expected $125 billion cost for fiscal stimulus measures aimed at keeping the economy from falling into recession.
The White House, which assumes passage of the president's budget proposals, sees the deficit holding at around that level -- $407 billion -- in fiscal 2009, but then shrinking markedly in subsequent years, reaching a $48 billion surplus in 2012.
Deficits had fallen steadily in the past three years after hitting a record $413 billion in fiscal 2004.
But Bush's fiscal 2009 budget only includes $70 billion in spending for wars in Iraq and Afghanistan, and doesn't include any funding beyond that. Due to the "fluid situation on the ground in Iraq," White House budget director Jim Nussle said the administration needs to wait for a new progress report from the U.S. commander in Iraq before determining funding levels.
"I think the main deceptions in the budget are the same ones we've seen for five years. The costs for Iraq and Afghanistan has consistently been $200 billion a year, but they've only put aside $70 billion," said Chris Edwards, economist at the libertarian Cato Institute. "The war will cost $100 (billion) to $150 billion a year until 2012 or so."
Coupled with unrealistic growth forecasts, the additional war costs mean the fiscal 2008 deficit will likely top $500 billion, he said.
.....
Economists say the White House forecast of 2.7 percent economic growth in 2008, which was released in November but which underlies the deficit projections, is too rosy given deteriorating conditions since then -- meaning near-term tax revenues are likely to disappoint as well.
"The odds are that the economy will grow less than the administration projects in 2008 and 2009, and that the deficits will be significantly larger than they project for a number of years," said Douglas Elmendorf, an economist at the Brookings Institution in Washington.
The nonpartisan Congressional Budget Office estimates growth this year at a paltry 1.7 percent, while the Blue Chip survey of private economists in January showed a consensus of 2.2 percent growth -- a projection likely to be marked down when the next survey is released on February 10.
President George W. Bush's final budget blueprint sees the deficit more than doubling in the current fiscal year to $410 billion, due partly to an expected $125 billion cost for fiscal stimulus measures aimed at keeping the economy from falling into recession.
The White House, which assumes passage of the president's budget proposals, sees the deficit holding at around that level -- $407 billion -- in fiscal 2009, but then shrinking markedly in subsequent years, reaching a $48 billion surplus in 2012.
Deficits had fallen steadily in the past three years after hitting a record $413 billion in fiscal 2004.
But Bush's fiscal 2009 budget only includes $70 billion in spending for wars in Iraq and Afghanistan, and doesn't include any funding beyond that. Due to the "fluid situation on the ground in Iraq," White House budget director Jim Nussle said the administration needs to wait for a new progress report from the U.S. commander in Iraq before determining funding levels.
"I think the main deceptions in the budget are the same ones we've seen for five years. The costs for Iraq and Afghanistan has consistently been $200 billion a year, but they've only put aside $70 billion," said Chris Edwards, economist at the libertarian Cato Institute. "The war will cost $100 (billion) to $150 billion a year until 2012 or so."
Coupled with unrealistic growth forecasts, the additional war costs mean the fiscal 2008 deficit will likely top $500 billion, he said.
.....
$500 Billion! The US would need to increase revenue by 20% just to cover the shortfall. This is rediculous, we can't aford anything. We would need to:
Get out of Iraq and Afghanistan (200 billion)
Cut the military budget (150 billion)
And reverse the Bush tax cuts (150 billion)
And you wonder why the dollar is falling when we have to finance over 1 trillion dollars just to continue US spending habits. I predict the next two years the Euro will become the reserve currency of the world and alot of egos will be hurt.
Public_Domain @ Mon Feb 04, 2008 11:49 pm
Canadaka @ Mon Feb 04, 2008 11:51 pm
blows my mind, i don't understand it. I am very proud of Canada for having a balance budget and one thats bean well in the green for many years.
Public_Domain @ Mon Feb 04, 2008 11:56 pm
dog77_1999 @ Tue Feb 05, 2008 12:30 am
Bill_Hicks Bill_Hicks:
Canadaka Canadaka:
blows my mind, i don't understand it. I am very proud of Canada for having a balance budget and one thats bean well in the green for many years.
Agreed.I don't know what they were thinking before they did this to themselves...
There is enough blame to go around.
The US should never of borrowed as much as it did when there was a shortfall. Now the budget must spend at least 10% just to pay interest on the debt.
The idea that the federal government can fix your problem is a promise that politicions should never of said. I don't think there has been an instance where the government has been more efficient then the private sector or more importantly that people couldn't do themselves.
Americans need to understand we don't have the USSR as an enemy. We don't need to spend billions maintaining all of our military. People honestly thing China or Iran is suddenly going to take over America if we don't increase the military budget every year.
The current strategy on the War on Terror is not working. Going into countries and rebuilding them is not cost effective and is causing alot of other problems. Police actions and other methods should be used.
Americans also need to pay our own debts. 2 trillion dollars in personal debt just shows you how we can't balance our own checkbook.
The window is closing here, the solution to this mess hurts, but it's going to be more painful each year.
Public_Domain @ Tue Feb 05, 2008 12:35 am
sandorski @ Tue Feb 05, 2008 12:59 am
It only takes 1 idiot to destroy years of hard work and sacrifice.
Yup, the US was on track to accumulate $5trillion in Budget Surplus. Instead it ended up with nearly $5trillion(closer to 4, but whateva) in new Debt. Gore had the best plan for that Surplus and that Surplus was going to go towards solving the US's impending SS crisis. Americans chose to be bought off with their own money rather than take the fiscally prudent path Gore was espousing.
I would say that "they've made their own bed...yaddayaddaya", but unfortunately for them they still seem to be making it.
dog77_1999 @ Tue Feb 05, 2008 1:05 am
sandorski sandorski:
It only takes 1 idiot to destroy years of hard work and sacrifice.
Yup, the US was on track to accumulate $5trillion in Budget Surplus. Instead it ended up with nearly $5trillion(closer to 4, but whateva) in new Debt. Gore had the best plan for that Surplus and that Surplus was going to go towards solving the US's impending SS crisis. Americans chose to be bought off with their own money rather than take the fiscally prudent path Gore was espousing.
I would say that "they've made their own bed...yaddayaddaya", but unfortunately for them they still seem to be making it.
Yup, the US was on track to accumulate $5trillion in Budget Surplus. Instead it ended up with nearly $5trillion(closer to 4, but whateva) in new Debt. Gore had the best plan for that Surplus and that Surplus was going to go towards solving the US's impending SS crisis. Americans chose to be bought off with their own money rather than take the fiscally prudent path Gore was espousing.
I would say that "they've made their own bed...yaddayaddaya", but unfortunately for them they still seem to be making it.
I wouldn't say it's all Bush's fault, though he can take a large share of the blame. The Republicans had control of Congress and refused to cut spending along with the tax cuts. You should know by now that all budget predictions do not account for economic downturns which included the tech bubble back in 2000.
The policy of borrowing money to finance debt to the degree we have is what has killed us. The government could of controlled its spending all of these years and stop the currency manipulations which created the record trade deficit, but nothing happened. This goes back all the way to Reagan and you can even say back to Truman when we should of dismantled our military and went back to pre-war levels instead of a Cold War.
Joe_Stalin @ Tue Feb 05, 2008 1:15 am
http://www.ndir.com/SI/education/debt.shtml
WhyTheFerret @ Tue Feb 05, 2008 11:35 am
Joe_Stalin Joe_Stalin:
http://www.ndir.com/SI/education/debt.shtml
http://www.brillig.com/debt_clock/
QBall @ Tue Feb 05, 2008 4:01 pm
Meh, If the Yanks don't seemed worried. Plus they don't care about anyones opinion except their own. So all you can do is... ![[popcorn]](./images/smilies/popcorn.gif "Eating Popcorn")
dog77_1999 @ Tue Feb 05, 2008 4:02 pm
WhyTheFerret WhyTheFerret:
Very scary. In 2 years we will pass 10 trillion.
dog77_1999 @ Tue Feb 05, 2008 4:12 pm
WhyTheFerret WhyTheFerret:
Very scary. In 2 years we will pass 10 trillion.