White House predicts record $1.47 trillion deficit

[DCBob]

WASHINGTON – 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.

"Despite these headwinds, the administration expects economic growth and job creation to continue for the rest of 2010 and to rise in 2011 and beyond," the report said.

The gaping deficits are of increasing concern to voters. But Obama and Democrats controlling Congress are mostly taking a pass on deficit reduction this year as they await possible recommendations from Obama's deficit commission.

more: http://news.yahoo.com/s/ap/20100723/ap_on_bi_ge/us_budget_deficit

This is a problem both from a long term economic standpoint and a political standpoint. And there is no easy answer for either.

[BootinUp]

1. I am mildly surprised

that you decided to post this.

[DCBob]

2. What is that supposed to mean?

[BootinUp]

6. nothing alarming

just that not more than 1 or 2 weeks ago you seemed to be arguing we should not highlight poor economic news.

[DCBob]

9. I dont think I ever said that.. I probably did say we shouldnt be boohooing positive news.

Anything positive posted here get bashed immediately by dozens of angry DUers.

[JuniperLea]

4. Meaning? eom

[DCBob]

7. I am mildly suprised you posted such an ignorant post.

[BootinUp]

8. A bit touchy today Bob? nt

[DCBob]

10. Not at all. I am just a happy as a pig in shit..

oink!

[BootinUp]

11. lol. nt

[JuniperLea]

3. Weren't we talking 3 trillion not long ago?

There were never any easy answers promised... Obama said it would get far worse before it got better. Well, it's far worse... here's hoping.

[msongs]

5. easy answer: less war and less corporate welfare give aways nt

[Kdillard]

12. Wow not good but then it was never going to be great. At least it is a little better than what was

estimated in February.

[Yupster]

13. We are kind of like a family that for the last 25 years

hes made $ 50,000 a year and spent $ 52,000 a year.

That's very bad, but with home equity loans, 401 k loans and credit cards it can be done.

Now the last two years we are a family making $ 48,000 a year that's spending $ 90,000.

That's going to be hard to do. or do anything about.

I don't know what the answer is?

Historically this kind of balance sheet would call for a good healthy dose of inflation.

[Clio the Leo]

14. This is setting up the push to end Bush's tax cuts ....

... well, that's ONE of the reasons.

[Ernesto]

16. Lett 'm expire!!!! nt

[golfguru]

15. So what? Let the people under 40 pay for the debt

It won't affect people like me, who are over 60.
Besides we need to spend to revive the failing economy.