Updated 7/26/2010: I just ran across this and thought it was a fitting followup to the deficit post. From Freedom Line:
The Obama White House promised that his “stimulus” would keep unemployment below 8%, but we’ve instead suffered months of approximately 10% unemployment. Gross domestic product reports are tepid and often revised downward, and the Labor Department reported this week that unemployment claims increased just as Obama and Biden embarked on their “Recovery Summer” tour.
Obama’s “stimulus” has only succeeded in adding almost $1 trillion to our nation’s unsustainable debt, while failing in its stated goals. For the same cost, we could have completely eliminated the income tax for an entire year. That’s right – no income tax at all for 2009. Imagine the real-world stimulative effect that would have had. Unfortunately, Obama and liberals prefer more government spending and control of taxpayer dollars to the true stimulative effect that the income tax elimination would have instead provided.
No income tax for a year sure sounds like a better alternative to me!
Not really a surprise given all the spending that's been going on in D.C. The bailouts, new social programs, extending benefits without cutting others, etc. It all has a name, and that name is $1.47 Trillion. With a capital T. Do you have any idea how much that is? It's 1 and 1/2 of these, where each of the tiny blocks is $1 million (that wee little thing in the lower left is a person):
Holy smokes! That's a lot of bills my children are accountable for. And their children. And grandkids...
From the AP:
WASHINGTON (AP) -- New estimates from the White House on Friday predict the budget deficit will reach a record $1.47 trillion this year. The government is borrowing 41 cents of every dollar it spends.
That's actually a little better than the administration predicted in February.
The new estimates paint a grim unemployment picture as the economy experiences a relatively jobless recovery. The unemployment rate, presently averaging 9.5 percent, would average 9 percent next year under the new estimates.
The Office of Management and Budget report has ominous news for President Barack Obama should he seek re-election in 2012 - a still-high unemployment rate of 8.1 percent. That would be well above normal, which is closer to a rate of 5.5 percent to 6 percent. Private economists don't think the unemployment rate will drop to those levels until well into this decade.
"The U.S. economy still faces strong headwinds," the OMB report said. They include tight credit markets, a high inventory of unsold housing and retrenchment by state governments bound by balanced budget mandates. The European debt crisis has also had an impact.
"Despite these headwinds, the administration expects economic growth and job creation to continue for the rest of 2010 and to rise in 2011 and beyond," the report said.
The gaping deficits are of increasing concern to voters. But Obama and Democrats controlling Congress are mostly taking a pass on deficit reduction this year as they await possible recommendations from Obama's deficit commission.
While there's a slight improvement in the deficit for the current year compared to the administration's February forecast, next year's predicted $1.42 trillion worth , next year's predicted $1.42 trillion worth of red ink - that's 37 cents of borrowing for every dollar spent - is looking worse. It's about $150 billion more than previously predicted, because of still-slumping tax revenues.
The current record holder is the $1.41 trillion deficit for 2009.
Economists agree that the most important measure of the deficit is against the size of the economy. Opinions vary, but many economists say a deficit of 3 percent of gross domestic product is sustainable since it would stabilize the overall debt when measured relative to the economy.
The report put the deficit at 10 percent of GDP this year and 9.2 percent of GDP next year. It would never reach the 3 percent figure under Obama's predictions - which underestimate war costs and depend on assumptions of tax hikes that may not materialize.
OMB Director Peter Orszag said the numbers represent a "fiscal situation that requires attention."
Obama "has done little to confront this domestic enemy," said Rep. Mike Pence, R-Ind. "Washington desperately needs real leadership. We cannot continue to postpone the hard choices and sacrifices that are necessary to stop this fiscal train wreck."
Deficits have skyrocketed since the recession took hold in 2008 and Congress responded with a massive bailout of the financial system and last year's $862 billion stimulus measure.
"What we should be doing now is putting in place deficit reduction policies that will kick in after the economy has more fully recovered," said Senate Budget Committee Chairman Kent Conrad of North Dakota. "It is an unsustainable long-term course."