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February 1, 2010
Deficits you can believe in
The Wall Street Journal reports President Obama will propose today a budget for fiscal 2011 that projects the deficit will "shoot up to a record $1.6 trillion this year," falling to $1.3 trillion in the fiscal year beginning October 1. The Journal elucidates numerous assumptions in Obama's budget reductions that depend on Congressional actions unlikely to occur, as well as significant spending increases within Obama's budget.
The New York Times report puts this in perspective:
Measured against the size of the economy, a $1.6 trillion shortfall would equal almost 11 percent of the gross domestic product. Economists generally consider annual deficits above 3 percent to be unsustainable.
In his State of the Union address, President Obama asserted that huge deficits were the result of things that happened "before I walked in the door." He is forgetting his own votes in the Senate (and those of his party) that helped produce them. And, of course, he was elected to bring change: the red sea of deficits was supposed to recede with his election (or maybe that was something else).