At The Foundry
The “Mid-Session Budget Review” projects that this year’s budget deficit will reach $1.471 trillion, or 10 percent of the economy. In nominal dollars, it’s the largest deficit in American history. As a percentage of the economy, it’s the largest deficit since World War II.
This will be the second consecutive year of trillion-dollar deficits that approach 10 percent of the economy. By comparison, the previous post–World War II record was 6 percent of the economy in 1983. Under President George W. Bush, deficits typically ranged between $160 billion and $400 billion (around 3 percent of the economy).
And the Obama Administration concedes that these large deficits are here to stay. It projects another $1.4 trillion deficit in 2011, followed by sustained deficits that never fall below $698 billion. The national debt held by the public—$5.8 trillion at the end of 2008—would soar to $18.5 trillion by the end of this decade.
These future deficits are driven almost exclusively by rising spending. President Obama’s budget would push inflation-adjusted federal spending past $36,000 per household by 2020—$12,000 above the level that prevailed under President Bush. Even President Obama’s enormous and anti-growth $3 trillion tax increase proposal won’t stop this spending spree from pushing the national debt to economically dangerous levels.
The Mid-Session Budget Review also confirms the failure of Obama’s economic agenda…