January 8, 2009

A DEFICIT SPENDING “BLOWOUT:” The looming red ink is unlike anything in U.S. peacetime history. Stimulus, or looting the treasury?

The Congressional Budget Office released its latest budget forecast yesterday, and we now really do have red ink as far as the eye can see. Thanks to a 6.6% decline in revenues due to recession, a spending increase of some $500 billion or 19%, and assorted federal bailouts, the U.S. deficit for fiscal 2009 (ending September 30) will nearly triple to $1.19 trillion. That’s 8.3% of GDP, which CBO says “will most likely shatter the previous post-World War II record high of 6.0 percent posted in 1983.” It certainly blows away any deficit this decade, not to mention the Reagan years when smaller deficits were the media cause celebre.

But there’s more. None of that includes the new fiscal “stimulus” that President-elect Obama has promised to introduce upon taking office in two weeks.

Nobody seems to be paying close attention to where the money is going . . . .

UPDATE: Reader Dart Montgomery emails: “Or where it’s coming from or how on earth it’s ever going to be repaid.”

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