More on the US Deficit

Submitted by Andrew Duguay Duguay on Tue, 02/02/2010 - 12:27

Update:  Below is an updated chart from last week's post using the new federal budget deficit projections released in the Fiscal Year 2011 Federal Budget.  For those hoping for at least a plateau in federal debt levels (as described in the previous post as an “r” shaped exit strategy), this appears to be a bit optimistic now.  

 

The latest white house projections show worse deficits than the CBO projected just last month

 

The worrisome part for businesses is that the new budget projects come with $1.9 trillion in new taxes on individuals and businesses.  All while increasing the debt/gdp ratio for the next 10 years.  If taxes were decreasing the debt it would be one thing, but higher taxes on top of even higher fiscal outlays is a major problem. 

 

And the White House has a history of drastically underestimating future deficits.....

 

The White House projected drastically smaller deficits just two years ago

 

Source: White House and CBO