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.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • SigFan

    You cannot increase the national budget by 40% and then claim that tax cuts are the reason why we’re running deficits.

    Rational people can’t – liberals will.

  • Bat One

    Now we know why congressional Democrats were too cowardly to pass a budget last year as required by the Constitution, and then tried to ram all the spending through after the election.

  • borborygmi

    funny how the CBO is right when it supports your position and wrong when it doesn’t

    • robert108

      You got it wrong, again. The CBO simply calculates from the numbers it is given. When it gets good numbers, it gives the right answer, but when it gets bad numbers, like from the present administration, it gives the wrong answer. Thanks for trying to politicize data, though; that’s exactly what snowbama does.

      • borborygmi

        okay let me restate. Isn’t it funny how the CBO always gets the wrong numbers when it is against your position and always gets the right numbers when it supports your position.

        • robert108

          You can twist and spin all you like, but all you have admitted is that when they tell the truth, they are on the side of conservatives, which is to be expected. As usual, you got cause and effect backwards.

        • http://sayanythingblog.com Rob

          And the problem, as it’s been explained to you before, is that the CBO must make its calculations based on assumptions given to it by the politicians.

          • borborygmi

            and you and others pick and chose when the numbers benefit you and poo poo them when the disagree.

          • robert108

            You are a very slow student. True numbers are good, untrue numbers are bad. Because leftie economics doesn’t agree with the truth, their numbers are always bad, and conversely, conservative numbers are good because we represent the truth. Got it?
            Left=bad numbers
            conservatives=good numbers
            Simple enough for you?

          • http://sayanythingblog.com Rob

            That’s because we apply things like “logic” and “critical thinking” to what the CBO produces.

    • Bat One

      It helps to understand the subject matter. The CBO is restricted by law to the parameters and conditions given it by those requesting the analysis. Both CBO and JCT (Joint Committee on Taxation) use so-called static analysis, as opposed to dynamic analysis or scoring. Thus things like economic growth and a resulting increase in the number of businesses and their respective employees are almost never figured into CBO or JCT assessments. So in good times, their tax revenue projections are known to be on the low side, and in bad times their projections are often far too optimistic. To judge how far off this CBO estimate is and in which direction we’d have to see the entire report and parameters on which it is based. But with an economy barely stumbling along and severe unemployment, its unlikely that the CBO projection of a $1.5 trillion deficit will turn out to have been too high.

      Incidentally, that $1.5 trillion is more than 10% of the entire federal debt. Put another way, roughly 35% of the entire federal debt has been taken on since Democrats took control of Congress in 2006.

      • robert108

        In fact, the projections of snowbama’s pet economists will be low, because they have been ordered to make things appear rosy(relatively speaking). The lack of any real economic stimulus(real tax rate cuts would have been nice) means that revenues will probably shrink, not grow. Relative to their projections, of course.

  • WOOF

    More Voodoo economics.
    Pay no attention to the man bound in the basement.
    [IMG]http://i51.tinypic.com/23lhwlz.jpg[/IMG]

    • robert108

      Define “voodoo economics”, mr. expert.

      • http://sayanythingblog.com Rob

        I’d define it as taking money from the private sector, turning it into government spending and then expecting the economy to grow and thrive.

  • robert108

    “You cannot increase the national budget by 40% and then claim that tax cuts are the reason why we’re running deficits.”

    Tax rate reductions increase revenue to the Treasury, so they prevent the deficit from getting even larger. It’s always about the spending.

  • http://realitybasedbob.sayanythingblog.com/ realitybasedbob

    What, so now nutters believe in CBO?

    You guys really need to get your stories straight.

  • http://sayanythingblog.com Mountainmouth

    Heads will roll at the CBO if they can’t find some way to hide the truth until after 2012.

    The Dems have been running their mouth about CBO numbers since before the midterms.

    Obama will just claim he is cutting government spending if he fires people that won’t back his deception – and then claim unemployment is actually going down

  • http://sayanythingblog.com Mountainmouth

    Almost as much as you need to get your accounting straight

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