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Obama Increases 2010 Deficit Forecast 19% to $1.50 Trillion

Discussion in 'Political Zone' started by JBond, Aug 25, 2009.

  1. JBond

    JBond Well-Known Member

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    Obama Increases 2010 Deficit Forecast 19% to $1.50 Trillion

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aNaqecavD9ek

    By Roger Runningen and Brian Faler

    Aug. 25 (Bloomberg) -- U.S. unemployment will surge to 10 percent this year and the budget deficit will widen to $1.5 trillion next year, reflecting a “deeper recession” than previously expected, White House budget chief Peter Orszag said.

    The Office of Management and Budget also forecasts that the U.S. economy will shrink 2.8 percent this year, worse than the 1.2 percent contraction the OMB projected in May. For next year, the budget office said the gross domestic product will grow 2.0 percent, less than the 3.2 percent expected in May. By 2011, the economy would be well on its way to recovery, growing at a 3.8 percent annual rate, according to the administration’s mid-year economic review, released this morning.

    The budget shortfall for 2010 will mark the second straight year of trillion-dollar deficits. The projected deficit for the fiscal year that begins Oct. 1 is higher than the $1.26 trillion forecast in May and reflects expectations economic growth will be slower this year and next because of “the severity of the crisis in the U.S. and in our trading partners,” said Christina Romer, White House chief economist, who along with Orszag briefed reporters on the report.

    The deficit and unemployment numbers may weigh down President Barack Obama’s drive for his top domestic priority, overhauling the U.S. health care system.

    ‘Bad, Bad Shape’

    “It throws a wrench in health-care reforms,” Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, said in an interview before the report was released. “No matter the specific numbers, they’re a constant reminder that we’re in bad, bad shape.”

    The Congressional Budget Office is scheduled to issue its budget forecast later this morning.

    The administration said last week that the deficit for the 2009 fiscal year, which ends Sept. 30, will be $1.58 trillion, less than the $1.84 trillion projected in May, because budget officials were able to delete hundreds of billions of dollars that had been set aside for bank bailouts. Last year’s deficit was $459 billion.

    “The Obama White House deserves some credit for managing the financial situation so that the additional bailout wasn’t necessary,” said Stan Collender, a former budget analyst for the House and Senate budget committees. “The changes from the previous forecast are one part good management, one part good forecasting strategy and one part good luck,” he said in a memo to budget reporters.

    10-Year Deficit

    Over the next decade, the budget picture is darker, with the 10-year deficit reaching $9.05 trillion, up from $7.1 trillion forecast in May, the budget office said Aug. 19.

    “Whatever their cause, the administration is very concerned about these out-year deficits, and getting those deficits under control is a top priority of the administration,” Orszag said.

    As a result, he said the budget blueprint Obama submits to Congress in February will “include proposals to put the nation back on a fiscally sustainable path; I’m not going to comment” on any specifics, he said.

    The median estimate of 31 economists in a Bloomberg News survey completed Aug. 21 was for a fiscal year 2010 deficit of $1.3 trillion.

    Orszag defended the trillion-dollar deficits during a recession and said it was desirable to reduce them as the economy recovers.

    “The first step is to stop making those deficits worse” by enforcing pay-as-you-go legislation so that “any new tax or entitlement” programs are paid for, and by adopting an overall of the U.S. health-care system that doesn’t add to the deficit, he said.

    Health-Care Reform

    “I know there are going to be some who say this report proves we can’t afford health reform,” Orszag said. “I think that has it backwards,” because savings must be squeezed from the system.

    Even with economic conditions worse that originally forecast, Romer said “we do expect positive GDP growth by the end of this year” for the fourth quarter, as the economy reaches “a turning point.” This is in line with 94 percent of Blue Chip economists, according to Orszag.

    “A return to employment growth will take longer,” Romer said.

    Obama and his advisers have repeatedly warned that their unemployment forecast of 8.1 percent for 2009 from earlier this year would be have to be revised. The president said in a Bloomberg Television interview in June that he expected it to reach at least 10 percent before declining.

    The jobless rate, which hit 9.5 percent in June before dipping to 9.4 percent last month, likely will rise to 10 percent by the end of 2009, averaging 9.3 percent for the entire year, Romer said. It will worsen to a 9.8 percent average in 2010, instead of the 7.9 percent estimate in May.

    Worse Recession

    “It’s in the fourth quarter of this year that we expect it to peak,” Romer said. “The recession was, simply, worse than” government forecasters expected, she said. “None of us has a crystal ball.”

    Romer said the economic stimulus package probably is adding “between 2 and 3 percentage points” to economic growth in the second quarter of this year, blunting conditions that would have been worse. A report on the effect of the stimulus program is due to Congress next month, she said.

    Inflation will remain subdued. Projections for the consumer price index show a contraction to 0.7 percent this year, rising to 1.4 percent next year and 1.5 percent in 2011, Romer said.

    The economic assumptions were compiled by the Council of Economic Advisers, Treasury Department and the Office of Management and Budget. The estimates reflect conditions as of early June.

    To contact the reporters on this story: Roger Runningen in Washington at rrunningen@bloomberg.netBrian Faler in Washington at bfaler@bloomberg.net

    Last Updated: August 25, 2009 09:30 EDT
  2. Doomsday101

    Doomsday101 Well-Known Member

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    And yet he said 30 days within his administration

    President Obama pledged to cut the nation's $1.3 trillion deficit in half by the end of his first term.

    "I refuse to leave our children with a debt they cannot repay," he said in remarks opening the one-day summit at the White House. "We cannot and will not sustain deficits like these without end. ... We cannot simply spend as we please."

    Oh well just more mis-information by the administration
  3. JBond

    JBond Well-Known Member

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    Obviously he is full of it. Every piece of bad news is completely unexpected. His "experts" must have the combined IQ of a dead squirrel. To expect the economy to recover when millions have lost their jobs is beyond stupid.
  4. Doomsday101

    Doomsday101 Well-Known Member

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    All this President does is tell each group he talks to what they want to hear. One day he tells a group that the public option is not a big part of the health care next it is another group and public option is a must. Well which is it? No wonder there is a lot of confusion out there when the dems and Obama can't seem to find a common story to tell the people. Of course his solution is to blame someone else, he is good at that.
  5. Cajuncowboy

    Cajuncowboy Preacher From The Black Lagoon

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    And yet he keeps spending and spending and spending and spending...

    And yet he still has people that support him. They are some of the dumbest people on the planet.

    I honestly don't know what it will take for them to wake up and see that this guy lied from the beginning and they were all BS'd.
  6. sbark

    sbark Well-Known Member Zone Supporter

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    somewhere john gault is smileing........Ayn Rand is saying I told you so....

    ........and Lenin is saying "things are right on schedule"

    "The best way to destroy the capitalist system is to debauch the currency" (see clovard piven strategy--easy google)
    "The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation."
    ~Vladimir Lenin
  7. theogt

    theogt Surrealist Zone Supporter

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    The last year of his first term is 2012. The current projections for the 2012 deficit is $557 billion, which is less than half of the $1.3 trillion deficit in Obama's claim.
  8. ShiningStar

    ShiningStar Well-Known Member

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    I thought Obama said unemployment will not go past 8 percent with the stimulus package?

    In fact I thought all this was over? What happened?
  9. CowboyMcCoy

    CowboyMcCoy Business is a Boomin

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    I know you are but what am I?;)
  10. Cajuncowboy

    Cajuncowboy Preacher From The Black Lagoon

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    FIFY.
  11. sbark

    sbark Well-Known Member Zone Supporter

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    Also of concern..........OMB's Orzsag's misinformation campaign on GNP #''s
    ...the USA economy can hangle 2008 debt levels at that GNP.....but with Obama doing everything he can to stifle GNP and at the same time quad the debt........Lenin would be proud.....

    The Office of Management and Budget also forecasts that the U.S. economy will shrink 2.8 percent this year, worse than the 1.2 percent contraction the OMB projected in May

    OMB's cooked the books all spring & summer in order for Obama to push his Cap/Crony & Death Care bills..........they needed a "sunny " picture so people would in hope swallow it...

    .........now they are planning to take it up the "other oriface" by force......by all of a sudden trying to say that Health Care can be a economic stimulus........good grief.......
  12. JBond

    JBond Well-Known Member

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    First of all it is $1.5 trillion not $1.3. Second is Obama and his merry band of idiots have been wrong on every number they have put out there. The CBO has been much closer to the correct number. The CBO and Obama agree that we will have at least a $9 trillion dollar deficit within 10 years, so how does that jive with your $557 by 2012? Is he going to reduce it and then increase it by 8.5 trillion?
  13. canters

    canters Active Member

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    Hopefully, stuff like this will kill off the "public option" arm of health care
    "reform". We simply cannot afford it.
  14. theogt

    theogt Surrealist Zone Supporter

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    According to the post I was quoting, the claim was half of $1.3 trillion. Are you reading it differently than me? My guess is the quote was made at a time when the deficit for 2009 was projected to be $1.3 trillion.

    And, no one is projecting at least a $9 trillion deficit within 10 years. The term "deficit" refers to a single year's budget. That claim, if made, would have to refer to "$9 trillion total in deficits over 10 years."
  15. JBond

    JBond Well-Known Member

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    Thanks for clearing that up. So if everyone is predicting a total combined deficit number of $9 trillion in 10 years how is Obama going to achieve his goal of $635 billion in 2012? Furthermore if it is only going to be $635 billion in 2012 why is Obama telling everyone the total will be $9 trillion 10 years from now? If he is able to cut if in half why would he grow it again? I am missing something.
  16. theogt

    theogt Surrealist Zone Supporter

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    I'm not sure where the $9 trillion claim came from, or the exact words of the claim, so I can't speak to it's validity.
  17. JBond

    JBond Well-Known Member

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    The CBO was quoted in the article.


    10-Year Deficit

    "Over the next decade, the budget picture is darker, with the 10-year deficit reaching $9.05 trillion, up from $7.1 trillion forecast in May, the budget office said Aug. 19."
  18. Ioz

    Ioz Benched

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    Unfortunately that statement is devoid of any truth...


    http://voices.washingtonpost.com/ezra-klein/2009/07/the_cbo_tells_people_to_calm_d.html
  19. JBond

    JBond Well-Known Member

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  20. Ioz

    Ioz Benched

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    It is not an entitlement in the way you are thinking. If you elect to go on the public option you still have to pay a premium. You pay for your own insurance.

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