We’re about to enter uncharted territory:
WASHINGTON – Budget hawks were aghast when the federal deficit hit a record $455 billion in fiscal 2008, more than double the previous year.
That figure could double again in 2009, to $1 trillion, but even balanced budget advocates are saying that may be the price we have to pay to revive the failing economy.
President-elect Barack Obama, at a news conference Monday, served notice that “we’re going to see a substantial deficit next year, bigger than we’ve seen in a very long time.”
But he stressed that, before putting Washington’s financial house in order, “we’ve got to first focus on getting the economy back on track. We’ve got to first focus on making sure that we’re creating those 2.5 million jobs.”
While nobody likes a deficit, many economists agree that heavy spending by the federal government — on food stamps or unemployment benefits or public works projects — may be necessary to keep economies moving in times of recession or war.
The problem is that this time Washington was racking up massive deficits even before the current economic downturn.
The other problem is that nobody knows what will happen when the budget deficit starts entering territory that makes any hope of returning to surplus nearly impossible.
November 25th, 2008 at 12:46 pm
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