CBO: America Set To Have Its Largest Budget Gap In History
More bad news from the CBO, in addition to the news that Social Security is officially broke: Despite a hew and cry from the public at large about run-away deficits contributing to an almost unpayable level of national debt, we’re set to hit another record deficit this year:
The weak economy and fresh tax cuts approved last month will help drive the federal budget deficit to nearly $1.5 trillion this year, the biggest budget gap in history and one of the largest as a share of the economy since World War II, congressional budget analysts said Wednesday.
“Economic developments, and the government’s responses to them, have – of course – had a big impact on the budget,” the Congressional Budget Office said in its semi-annual budget outlook.
This year’s deficit would be the highest on record and would equal about 9.8 percent of the economy, the CBO said, slightly smaller than the 2009 budget gap, which at $1.4 trillion amounted to nearly 10 percent of the gross domestic product. However, at a time when policymakers had hoped to begin closing the gap between spending and revenue, the CBO forecast that it is widening again and is on track to remain well above $1 trillion in 2012, the fourth year in a row.
As a result, the report said, “debt held by the public will probably jump from 40 percent of GDP at the end of fiscal year 2008 to nearly 70 percent at the end of fiscal year 2011.”
It’s funny that the Bush tax cuts are hit for contributing to the deficit, but yet no mention is made of the rapid increase in spending over the last several years.
In 2006 total US spending was at $2.655 trillion. In 2010 we were at $3.721 trillion, and we’re projected to hit $3.8 trillion this year. From 2006 – 2010 that’s an over 40% increase in spending.
You cannot increase the national budget by 40% and then claim that tax cuts are the reason why we’re running deficits.Tags: cbo, deficits, national debt