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Barack Obama’s Sea Of Red Ink

by @ 3:06 pm on May 11, 2009. Filed under Barack Obama, Economics, Politics

The news just keeps getting worse when it comes to the utter fiscal irresponsibility of the Obama Administration:

WASHINGTON (AP) — With the economy performing worse than hoped, revised White House figures point to deepening budget deficits, with the government borrowing almost 50 cents for every dollar it spends this year.

The deficit for the current budget year will rise by $89 billion to above $1.8 trillion — about four times the record set just last year. The unprecedented red ink flows from the deep recession, the Wall Street bailout, the cost of President Barack Obama’s economic stimulus bill, as well as a structural imbalance between what the government spends and what it takes in.

As the economy performs worse than expected, the deficit for the 2010 budget year beginning in October will worsen by $87 billion to $1.3 trillion, the White House says. The deterioration reflects lower tax revenues and higher costs for bank failures, unemployment benefits and food stamps.

For the current year, the government would borrow 46 cents for every dollar it takes to run the government under the administration’s plan. In one of the few positive signs, the actual 2009 deficit is likely to be $250 billion less than predicted because Congress is unlikely to provide another $250 billion in financial bailout money.

But that’s just one very dim bright spot in a budget picture that looks, quite honestly, bleak for the next ten years if this man is permitted to continue on his present course:

Annual deficits would never dip below $500 billion and would total $7.1 trillion over 2010-2019. Even those dismal figures rely on economic projections that are significantly more optimistic — just a 1.2 percent decline in gross domestic product this year and a 3.2 percent growth rate for 2010 — than those forecast by private sector economists and the Congressional Budget Office.

All of this assumes, of course, that the world will continue buying our debt. When that stops happening all bets are off.

7 Responses to “Barack Obama’s Sea Of Red Ink”

  1. EJ says:

    obama is currently doing the opposite of “starve the beast theory”. Hes ramming a ton of new spending now and worrying about how to pay for it later, at which time an argument will be made that massive tax increases are the “fiscally responsible” thing to do. Until then, he, the congress and the Fed are playing with fire and hoping the foreign demand for our debt stays strong enough, and the Fed will be able to time turning the printing spicket off correctly, to avoid high interest rates, a falling dollar and massive inlfation. They are all being increadably reckless… so much for “a new era of responsibility.”

  2. Republicans take a dump on the kitchen floor then complain about the cost of the Lysol we use to clean up after them.

    Yes, it’s expensive undoing the damage. It’s costly rescuing the banking system, stimulating the economy, covering the shortfall occasioned by your tax cut for the rich, continuing to pay for two mismanaged wars, and servicing the debt and commitments (prescription drug plan?) the GOP piled up over the last 8 years.

    Here’s a thought for the future: we don’t let you people anywhere near power. Then we won’t have to fix your messes. And then you won’t have to get so upset at the cost of cleaning up your mistakes.

  3. Groveton says:

    All of this assumes, of course, that the world will continue buying our debt. When that stops happening all bets are off.”.

    What does happen if the world stops buying our debt? Everybody says that bad things would occur. They are probably right. But what bad things? How would our economy look if the world stopped buying US debt?

  4. EJ says:

    well it wouldnt just stop buying our debt; it would stop buying our debt at such low rates. Foreign inflows are alreayd slowing down. On net the bulk of new debt in recent months has had an equivelant amount of new money printed byt he Fed. This is unsustainable. Once this ends and foregn appatite for us slows, interest rates are going to get much higher. This will cause slower eocnomic growth ad if coupled with continuing huge budget deficits, heavy inflation. This could get itneresting in the next coupld of years.

  5. Joseph says:

    “the utter fiscal irresponsibility of the Obama Administration” and the previous “regieme” was always so careful of where the money when.

    Your boys partied too hard and now it’s time to clean up the mess.

    By the way, shut the fuck up.

  6. tfr says:

    If the Great Depression is any model, we can expect a mild recovery for the next year or two, then over the cliff. I don’t know – I imagine we’ll go over 10% unemployment and 10% inflation at that time, but that’s just a guess. So far the gov’t, under both parties, has indeed acted in almost exactly the same fashion as following the 1929 crash, so results can be expected to be similar.

    This obviously goes beyond party. We’ve trashed our economy and sold our grandkids down the river. Might as well stop pointing fingers, because we’re all to blame. Now is the time to learn what went wrong and how to stop it from happening yet again.

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