Friday Night Bad News Dump


Obama was hoping you wouldn’t notice the new record deficit he set. It’s more than three times as large as the deficit was when Bush left office.

White House predicts record $1.47 trillion deficit this year, 9 percent unemployment next year

New estimates from the White House on Friday predict the budget deficit will reach a record $1.47 trillion this year. The government is borrowing 41 cents of every dollar it spends.

That’s actually a little better than the administration predicted in February.

The new estimates paint a grim unemployment picture as the economy experiences a relatively jobless recovery. The unemployment rate, presently averaging 9.5 percent, would average 9 percent next year under the new estimates.

The Office of Management and Budget report has ominous news for President Barack Obama should he seek re-election in 2012 — a still-high unemployment rate of 8.1 percent. That would be well above normal, which is closer to a rate of 5.5 percent to 6 percent. Private economists don’t think the unemployment rate will drop to those levels until well into this decade.

“The U.S. economy still faces strong headwinds,” the OMB report said. They include tight credit markets, a high inventory of unsold housing and retrenchment by state governments bound by balanced budget mandates. The European debt crisis has also had an impact.

See also:
Mid-Session Review
Budget of the U.S. Government

Federal budget deficit to exceed $1.4 trillion in 2010 and 2011
Forecast for 2011 Deficit Is Raised to $1.4 Trillion
Obama Budget Office Forecasts $1.47 Trillion Deficit This Year
Obama’s budget deficit heading further up
US deficit heads toward record $1.47 trillion
Federal deficit expected to reach record high
OMB: Economic pain will linger
US predicts record budget deficit
U.S. economy faces strong headwinds: White House
U.S. Trims ’10 Deficit Forecast as Economy Faces Headwinds
Republicans pounce on new OMB deficit predictions
Budget 2011: Past Deficits vs. Obama’s Deficits in Pictures

And remember, these record deficit projections are based on rosy White House economic assumptions.

Real GDP is expected to rise by 3.1 percent during the four quarters of 2010 and to increase 4.0 percent in 2011. The growth rate is projected to rise to 4.3 percent in 2012 and 4.2 percent in 2013 as the economy returns closer to its potential output level. Beyond 2013, real GDP growth is projected to moderate, declining gradually to 2.5 percent per year in 2018-2020.

If the U.S. economy falls short of these GDP projections, the now record deficits will become even worse. And you don’t even want to think about what happens if interest rates rise significantly and it costs the U.S. Government even more to borrow these incredibly humongous amounts of money.

/there’s no way that Obama can legitimately blame Bush for this budget mess anymore, although that won’t stop him from trying to revise history

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One Response

  1. If it didn’t represent our future, spiraling wildly out of control, it might actually be fun to watch…

    http://www.usdebtclock.org/

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