CBO Summer Updater 09: Weak Revenues, Elevated Spending, Economic Downturn, And Financial Turmoil

LuckyBogey's Blog ^ | August 25, 2009 | LuckyBogey

[luckybogey]

“The alarm bells on our nation’s fiscal condition have now become a siren” “If anyone had any doubts that this burden on future generations is unsustainable, they’re gone — spending, borrowing and debt are out of control.” Senate Minority Leader Mitch McConnell

Today CBO issued its annual summer update of the budget and economic outlook. CBO estimates that the federal budget deficit for 2009 will total $1.6 trillion, which, at 11.2 percent of gross domestic product (GDP), will be the highest since World War II. That deficit figure results from a combination of weak revenues and elevated spending associated with the economic downturn and financial turmoil. The deficit has been boosted by various federal policies implemented in response, including the stimulus legislation and aid for the financial, housing, and automotive sectors...

Since it last issued baseline projections in March, CBO has reduced its estimate of the deficit for 2009 by $80 billion. Both outlays and revenues are now expected to be lower in the current year than previously estimated, by $165 billion and $85 billion, respectively. A large drop (of $203 billion) in the estimated subsidy cost of the Troubled Asset Relief Program (TARP) dominates the change in projected outlays for 2009; other changes (mostly in revenues) offset much of that decrease...

...Beyond the 10-year budget window, the nation will face further significant fiscal challenges posed by rising health care costs and the aging of the population. Continued large deficits and the resulting increases in federal debt would, over time, reduce economic growth. Putting the nation on a sustainable fiscal course will require some combination of lower spending and higher revenues than the amounts now projected.

[luckybogey]

Posted in Bloggers Section. Blog Post includes: CBO Director’s Blog: Annual Summer Update — Forbes: Retarding Recovery — Ben Bernanke: The Man Most Likely to Destroy American Capitalism — Dismantle Bernanke’s ‘Happy Conspiracy’ … now!

Uploaded Related CBO Files:

The Budget and Economic Outlook: An Update (August 2009)

CBO: Budget Options Volume 2 (August 2009)

CBO Data: Selected Figures 2-1 Through 2-12

CBO Baseline Projections

[Gaffer]

And, yet, Zer0 vacations in Martha’s Vineyard whilst cases of Krystaal, crates of iced lobster, hundreds of pounds of Kobe Beef, cases of caviar, and other untold delicacies await their nightly feast celebrating their rule over the common American whom they detest.