The Devil Is in the Deficits

American Spectator ^ | 3/10/2010 | Peter Farrara

[IbJensen]

Last week, the Congressional Budget Office (CBO) issued its long-term projections regarding President Obama's new budget proposal this year. Those projections show even higher Federal spending, deficits, and debt than Obama's budget confessed to just last month.

The CBO projects that President Obama's deficits would be $1.2 trillion higher over the next 10 years than estimated in Obama's budget released on February 1. Federal deficits over those 10 years would be almost $10 trillion ($9.761). National debt held by the public would double in just 4 years, from $5.8 trillion at the end of 2008 to $11.6 trillion at the end of 2012. It would almost quadruple to $20.3 trillion by 2020, $1.7 trillion more than Obama projected just last month.

That national debt in 2020, CBO further projects, will be 90% of GDP, which means the federal government will owe almost as much by then as our entire economy produces in a year. But it gets even worse. Total Gross Federal Debt, which includes such items as the debt held in the Social Security trust funds (real debt that will have to be paid in the future), would be over $27.5 trillion. That would be 122% of GDP.

That is well into the level at which national debt begins to sharply reduce economic growth for advanced, developed economies, according to a new economic study from Harvard University and the National Bureau of Economic based on new data on forty-four countries spanning about two hundred years. The dataset incorporates over 3,700 annual observations covering a wide range of political systems, institutions, exchange rate arrangements, and historic circumstancesResearch, by Kenneth Rogoff and Carmen Reinhart. That study was "."

The study concludes that developed economies with debt to GDP over 90 percent suffer median economic growth roughly 1 percentage point lower.........

[IbJensen]

BHO is purposely destroying our economy before our very eyes.

He incessantly lies about deficit neutrality, failure support real job growth, emphasis on government control and takeovers, and employs mafia-style tactics whispered into his ear by his godfather confidant Rahm Emmanuel.

[Texas resident]

BHO dosen’t give a damn because he thinks it will never affect him. He is a citizen of the world and probably has an escape plan to take his millions and scoot away after his first term.