Does the U.S. government have spending and deficits under control?
*Bloomberg, by Brian Faler, August 25, 2009
“The U.S. government will run a budget deficit of $1.6 trillion this year and $1.4 trillion in 2010, and the unemployment rate next year will be higher than the White House forecasts, the Congressional Budget Office said.”
“The CBO said this year’s deficit, for the fiscal year ending Sept. 30, will total about 11.2 percent of the nation’s economy, which would be the biggest since World War II.
The agency said it doesn’t expect the deficit to shrink below $500 billion any time in the next 10 years and that the federal debt will grow will this year to 54 percent of GDP. By 2019, the nation’s debt will amount to 68 percent of the economy, CBO said.
Spending this year will increase by about $700 billion, the bulk of it stemming from the government’s response to the financial crisis, the agency said.
The government takeover of mortgage financiers Fannie Mae and Freddie Mac has cost $291 billion while the Treasury Department’s Troubled Asset Relief Program cost another $133 billion, the CBO said. In addition, it estimated total spending this year tied to the stimulus package will reach $115 billion.
Federal spending will grow this year by 24 percent, the biggest increase since 1952, according to the CBO. At the same time, it said, revenue will fall this year by 17 percent, the largest drop since 1932.”
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