The director of the Congressional Budget Office director Douglas W. Elmendorf updated his projections for the budget and economic outlook and is now anticipating a $1.8 trillion deficit this year, and $1.4 trillion in 2010.
In short, the US government is borrowing 50 cents for every dollar it spends.
Largely as a result of the enactment of recent legislation and the continuing turmoil in financial markets, CBO’s baseline projections of the deficit have risen by more than $400 billion in both 2009 and 2010 and by smaller amounts thereafter. Those projections assume that current laws and policies remain in place. Under that assumption, CBO now estimates that the deficit will total almost $1.7 trillion (12 percent of GDP) this year and $1.1 trillion (8 percent of GDP) next year—the largest deficits as a share of GDP since 1945. Deficits would shrink to about 2 percent of GDP by 2012 and remain in that vicinity through 2019.
Keep the change.