CBO Projects $442 Billion Federal Deficit

[KB]

Tax and spend liberals...to no tax and spend conservatives. Whatever happened to the party of "fiscal responsibility"?

http://news.yahoo.com/news?tmpl=story&u=/ap/20040907/ap_on_go_co/budget_deficit_8

[KB]

Congress' deficit forecast worsens

Analysts say deficit will hit $2.29 trillion in 10 years; earlier forecast was $2.01 trillion.
September 7, 2004: 12:25 PM EDT

WASHINGTON (*******) - The U.S. budget deficit will balloon to $2.29 trillion over the next decade, congressional analysts said Tuesday. This represents a worse outlook than previously forecast and one likely to stir election-year debate about President Bush's economic policies.

The forecast from the nonpartisan Congressional Budget Office compares to its March outlook for a cumulative deficit of $2.01 trillion for the 2005-2014 period, if current economic policies stay the same.

"The outlook in terms of the deficits in 2004 and 2005 has improved, but the projection of the cumulative deficit over the 2005-2014 period has worsened," the CBO said in a summer update of its budget outlook.
The CBO confirmed a preliminary forecast made in August for a record deficit of $422 billion for the 2004 fiscal year.

That number compares to the White House's latest deficit outlook of $445 billion for this year and was better than earlier estimates. The White House no longer provides a 10-year deficit forecast.

CBO is expecting the deficit to decline to $348 billion in 2005, if current laws and policies do not change.

"This report underscores that our policies are working to create a stronger economy, more jobs and a lower deficit," said House of Representatives Budget Committee Chairman Jim Nussle, an Iowa Republican.

The economy, particularly the deficit, has become a key theme between the two presidential candidates.

Bush blames the 2001 recession, the costs of the aftermath of the Sept. 11 attacks and the war on terror for the growing budget shortfall.

Democrats say Bush's tax cuts are responsible for turning the surplus he inherited into a record deficit, which they say threatens the future of Social Security and the Medicare health-care program for the elderly.
"Only George W. Bush could celebrate over a record budget deficit of $422 billion," Democratic presidential candidate John Kerry said in a statement Tuesday.

Kerry said he has a plan to restore fiscal discipline, rein in "out of control" spending and cut the deficit in half in four years.

CBO warned that even if the economy grows more rapidly than projected, "significant long-term strains" on the budget will get worse within the next decade as the baby-boomers begin to retire.

The report projects economic growth of 4.5 percent in 2004 and a slightly slower 4.1 percent next year.

CBO also forecasts that the federal government will reach its $7.384 trillion debt limit in October.

The U.S. Treasury has asked Congress to raise the borrowing ceiling for the third time in three years, a sensitive vote Republicans would like to avoid ahead of the election.

[2Sheds_Jackson]

The sky is falling! The sky is falling! Billions! Trillions! Financial Ruin!

Feh - I'm all for fiscal restraint - but this is not "the highest ever" as the alarmist article proclaims. This is obviously just an innocent omission by a reporter lacking the resources that I (with no journalistic training, and not employed by a media entity) have at my disposal. No media bias here - it's just that I'm so gosh darned smart. ;)

Bullsh*t- if the press was interested in presenting straight facts, they would. They're more concerned with anointing their new king.

Only in sheer numbers of 2004 dollars is it a record - and that matters very little. In terms of GDP, it's far from a record. For example, if your income is $25,000, and in one year you put $10,000 on a Visa card - you should worry. If you make $140,000 and put $10,000 - you don't need to be staying up late at night worrying about it.

Here's some figures of the national debt as a function of the GDP
1941 50.5%
1942 54.9%
1943 79.2%
1944 97.6%
1945 117.5%
1946 121.7%
1947 109.6%
1948 98.3%
1949 93.0%
1950 93.9%
1951 79.5%

Note that in '45 & '46 the debt exceeded the GDP.

From 2000 through 2007 the debt is projected to not exceed 59.3% of the GDP. In the early through mid '90's (remember the Clinton wonder years) it ran at about 64-67%.

Should we pay attention and be concerned - you bet. But this is not a case of fiscal ruin, as some seeking to unseat Bush would have us believe. (my numbers came from CBO documents online)