White House Sharply Increases Deficit Projection to $1.6 Trillion

[steven johnson]

Source: Washington Post,

The federal deficit will soar to nearly $1.6 trillion this year, miring the nation in the deepest pool of red ink since the end of World War II, the nonpartisan Congressional Budget Office and the White House reported Tuesday.

The gap between spending and tax collections will amount to 11.2 percent of the overall economy, more than tripling last year's deficit of $459 billion, the CBO said. The yawning gap is almost entirely the result of the severe economic downturn, the CBO said, which produced the sharpest drop in tax collections since the Great Depression and the biggest increase in spending since the Korean War.

On the bright side, the deficit is now expected to be slightly lower than officials had feared earlier this year, thanks to dramatically reduced spending on the bailout of the nation's financial institutions that was approved by Congress in October. The Troubled Asset Relief Program cost only $133 billion this year, the CBO said -- about $200 billion less than expected in March

Both the White House and the CBO said the recession should end within a few months, and the CBO credited a $787 billion stimulus package President Obama signed in February with hastening the economic rebound. But congressional economists are predicting "a relatively slow and tentative recovery," and Christina Romer, chairman of the president's Council of Economic Advisers, acknowledged that the unemployment rate is likely to hit 10 percent later this year and remain there through the first months of 2010.




Read more: http://www.washingtonpost.com/wp-dyn/content/story/2009/08/25/ST2009082501309.html

[berni_mccoy]

1. The Media and GOP are saying 2 Trillion. Because 400 billion is chump change I guess.

[ltf1]

3. Deficits and Lieberman & health care

These new projections are why Lieberman jumped-ship on health care. They most certainly will prevent Democrats from getting 60 votes and may well stop them fr getting 51.

[MannyGoldstein]

19. I Think The Extra $2 Trillion Is Over Next 10 Years

$1,6 trillion is just (!) the deficit for this year alone.

[Beavker]

2. The Pigs will quote the CBO on the deficit like it's gospel huh?

How about quoting this part of it?:

Both the White House and the CBO said the recession should end within a few months, and the CBO credited a $787 billion stimulus package President Obama signed in February with hastening the economic rebound.

Oh, wait, they only speak of news they can twist into anti Obama, like Fox News, facts can be used to support anything if you just use a snippit to fit your needs.

[dixiegrrrrl]

4. Yayyyy..the recession is ending soon. Ok, everybody, back to work now. Chop chop.

[Psephos]

17. The stimulus package is 85% unspent to date

I don't think I'd be crediting it with too much here.

Meanwhile, France and Germany have just pulled out of recession, showing actual growth in GDP. Both countries did not enact a stimulus plan. The Germans frankly said they couldn't afford it, and they weren't going to borrow the cash from foreigners.

[DuaneBidoux]

5. I can't accept Obama saying "the economy was worse than we thought."

If that is true then this has been his biggest self deception since the start of his presidency.

Was he paying attention last fall?

We were two heartbeats away from another Great Depression. I can accept other excuses for the increase in projections but not that he underestimated the severity of the economic downturn.

[Scarsdale Vibe]

7. Worse than they thought in Dec/Jan

The Romer/Bernstein projections were only slightly below the CBO and Blue Chip Consensus forecasts at the time. There were quite a few economists that thought the first quarter of this year wasn't going to be as bad as it was. These projections were also made before Q4 of 2008 was revised downward.

It's the nature of economic projections that not everyone is going to get it right, but the Obama administration was near the majority of forecasts made in January. It doesn't excuse the fact that they were wrong, but they had sizable company in being wrong.

[DuaneBidoux]

8. Maybe. But I watched as the entire banking system teetered on the edge of

collapse in the fall. Anyone who doesn't think that is nearly as bad as it can get has not been reading history (which of course apparently nobody had been reading for at least 8 prior years).

[Festivito]

6. .6 of the 1.6 belongs to Bush before BHO took over.

Bush also added and additional .36 (T$) in 12 days before that. Picking up the pieces after Bush left us with a mess has not been as costly under Obama as the press would lead us to believe.

For links, I repost my STOCK MARKET WATCH report with some changes I made today:
If you like you can go to the Debt to the Penny and check the amounts yourself for the dates you want to see. MS calculator takes copy and paste with commas directly from the web pages. Good luck. And if you find any mistakes, please post them for all to read. I can take the hits.

Link at bottom takes you to prior reports.
UPDATED REPOST:
-----------------------------------------
Debt: 08/21/2009 11,719,258,192,538.99 (DOWN 1,570,362,841.17) (Up 1/3B$, FICA down 1.9B$.)
(Debt up one third of a billion, while the FICA side goes down a tenth less than two billion.)

= Held by the Public + Intragovernmental(FICA)
= 7,385,460,451,439.75 + 4,333,797,741,099.24
UP 333,547,281.04 + DOWN 1,903,910,122.21

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 307-Million person America.
If every American, man, woman and child puts in $3.25 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.76, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
Every 10 seconds we net gain a another American, so at the end of the workday of the report, there should be 307,236,981 people in America.
http://www.census.gov/population/www/popclockus.html ON 08/24/2009 13:24 -> 307,261,605
Currently, each of these Americans owe $38,144.04.
A family of three owes $114,432.11. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 24 reports in the last 30 to 31 days.
The average for the last 24 reports is 4,787,257,227.22.
The average for the last 30 days would be 3,829,805,781.78.
The average for the last 31 days would be 3,706,263,659.78.
There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 148 reports in 213 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.13B$/day so far.
There were 223 reports in 325 days of FY2009 averaging 7.60B$ per report, 5.21B$/day.

PROJECTION:
There are 1,248 days remaining in this Obama 1st term.
By that time the debt could be between 13.4 and 18.2T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
08/21/2009 11,719,258,192,538.99 BHO (UP 1,092,381,143,625.91 so far since Obama took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 1,694,533,295,626.50 so far this fiscal year, broken down below:
Borrowed in FY2009: 0,602,152,152,000.59 in part from time during Bush reign.
Borrowed in FY2009: 1,092,381,143,625.91 in part since Obama takes over.


LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
08/03/2009 -005,083,538,887.00 -- Mon
08/04/2009 -000,056,382,262.77 ----
08/05/2009 +000,017,974,078.47 ------------*******
08/06/2009 -000,578,106,269.92 ---
08/07/2009 +000,290,467,707.81 ------------********
08/10/2009 +000,222,135,743.03 ------------******** Mon
08/11/2009 +000,246,752,500.45 ------------********
08/12/2009 +000,081,638,592.29 ------------*******
08/13/2009 +004,096,319,823.99 ------------*********
08/14/2009 +000,017,806,259.60 ------------*******
08/17/2009 +012,224,191,599.44 ------------********** Mon
08/18/2009 +036,282,270,009.21 ------------**********
08/19/2009 +000,703,521,737.77 ------------********
08/20/2009 +001,088,553,104.23 ------------*********
08/21/2009 +000,333,547,281.04 ------------********

49,887,151,017.64 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4031190&mesg_id=4031277

[sythe200]

9. Who cares who caused the deficit?

The point is that our government is spending dollars like they are going out of style (which they will be if we keep it up)! I don't care if it was Bush, Obama, or the Martians, it needs to stop!

[n2doc]

11. perhaps taxes should go back to Reagan levels?

2 sides to every problem. Enjoy your stay....

[Deja Q]

12. Cause and continuating - it is relevant.

Clinton at least stopped the hemorrhaging. That took him the better part of a term to do too.

It's damn important. Because when you say you're the party of fiscal responsibility, you do it that way. Ditto for the party of family values; you don't say it and then support everything that tears families apart (especially when it comes to the economy, which is one of the more prime contributors to divorce.) Not to mention Newtie-poo's own history - he's not the sort of person who has the credibility to say what he does.

[Festivito]

16. Opposite assertion, and no supporting data. Sounds... R-poopligan!

Or, just a small time paid stooge willing to ruin his own country for chump change.

[sythe200]

18. Perhaps we should all just ignore the problems when our guy

is in power and then piss and moan when the repubs do the same thing that we did right? Bush racks up huge deficits and we all sit here and bemoan the sorry state of the union. Then Obama racks up even bigger deficits and all of a sudden it's ok. And by the way, why does opposing deficits make me a... R-poopligan? How does that even make sense?

[Festivito]

21. I pointed to your lack of data, not your lack of subject matter.

We were handed an economy in tailspin, banks failing and continuing to fail, unemployment high and rising, our infrastructure deteriorated, our industries decimated and worse, deficits rising fast, our wealth pilfered beyond wealth into our credit both governmental and personal, and on and on due to the ill affects of the Bush admin.

And you want this solved now, suddenly not spending.

Have you presented which cuts you want from just the overspending we had been doing on a regular basis while times looked good, let along with the current economic mess? I'll answer for you. No you have not. You're lucky to see beyond your own nose. And, if you think that is a put down, it is, but, only as long as you don't have supporting information behind you -- such information I would be happy to read, discuss and push were it right.

Until then, I do wish you well.

[samsingh]

10. this is the BUSH DEFICIT

[MadMaddie]

14. That's the point the gets overlooked time and time again!

This deficit didn't happen in 7 months.

* and the media were not reporting the actual cost of the 2 wars.

[Mari333]

13. Cut Defense spending by 2/3 and get us out of both those goddamned occupations

and the economy will fix itself.

[amandabeech]

22. That would help tremendously.

But it doesn't look like we're going to get a net savings between winding down in Iraq and ramping up in Afghanistan.

Besides, I don't see this health bill, whatever it is being called now, as really addressing cost control.

[Mythbuster]

15. So where is it coming from??

I mean this in all sincerity. I'm not an economist and don't profess to be, but when I'm debating with the conservative mobs I like having my ducks in a row. They are continually chanting that Obama and the dems are just "spend, spend, spend!" Well I don't see it, and every time I pin them down on the question of "What has been spent in the last 7 months?" None of them can respond. So my question to the more economics savvy of you is... what is the deficit projection being attributed to? What's the cause of it? Is this interest on the 4.5 trillion "W" left us with? Continued spending at 10+ $billion/month on Iraq and now increased spending in Afghanistan? I'm all ears, I'd love to have some good solid numbers to quote instead of bullshit talking points that neocon leftovers keep repeating.

[MannyGoldstein]

20. It's A Tough Question to Answer

Let's say that you're earning $1000 per week, but spending $1100 per week. What are you spending the extra $100? Basically, you could pick any part(s) of that $1100 and say "that's the extra $100". Or you could say that the problem is that you're only bringing in $1000, and it really should be $1100, sort of like the money the government's not getting thanks to the Bush tax cuts.

[Lagomorph]

23. Good question. Mandatory Spending.

Government spending is about 1/6th of the GDP and projected to rise to 1/4th the GDP.

It's Medicare, Social Security, defense, cost of government, fraud...

We're having a tough time selling T-Bills. The last time, the Fed bought about half of them.

That's like depositing a bad check in your bank account and then spending it with your debit card.

The message here is nobody wants our money. That's not a good thing.

Money is not a "thing", it's a measurement of economic activity. When the economy slows down, the numbers should go down.

Our economists spend a lot of time gaming the numbers to make things look better than they are.

Our economic "LaLaland" is not a Progressive place. Our current combined private and government debt is somewhere around $195,000 per person.

[Mythbuster]

25. Thanks!

I appreciate the responses! I've read more than once that the Bush Admin was great at "hiding debt" by using some figures and ignoring others to make things look "ok" when they really weren't. It's apparent now that things weren't quite as rosy as they were leading people to believe and we were actually in a recession as far back as the end of 2007. But as per usual, the damage they did just happen to come to fruition, once again, at the end of their term, and the Dems get left with cleaning up the mess and the Right-Wingers try to saddle the left with the responsibility for it. I just hope that we haven't gone too far this time and Obama can be as successful as Clinton with righting the ship.

[NecklyTyler]

24. President Obama knows what he is doing

It may be a white knuckle ride for a while, but this spending is necessary to bring the economy back to health. When the employment get back up into the neighborhood of 95%, all the delayed spending from the recession will kick in and the deficits will go way down. The deficits may even turn into a balanced budget in the President's third year in office

[bamacrat]

26. I keep seeing 9 Trillion deficit on CNN and over news outlets, WTF?

Also a reason our deficit is so high is that Obama is including the cost of the wars in the budget. Something Bush didn't do. But seriously where is the 9 Trillion coming from?