2008 deficit forecast soars to $407B – Sep. 9, 2008
NEW YORK CNNMoney.com — The budget deficit will jump by $246 billion to $407 billion this year, the Congressional Budget Office estimates in a report released Tuesday.
“Over the long run, growing budget deficits and the resulting increases in federal debt would lead to slower economic growth,” the agency said.
Last year, the budget deficit was $161 billion. The governments fiscal year ends Sept. 30. The agency attributes the jump to “a substantial increase in spending and a halt in the growth of tax revenues.”
Not only are home foreclosures at a record high in the US, but national unemployment also climbed above the psychologically important 6 percent level last month for the first time in five years – and it’s likely to go even higher in the months ahead, possibly throwing the economy into a tailspin as Americans pick a new president. The rate has steadily climbed this year from a cycle low of 4.4 per cent and now sits just below the peak of 6.3 per cent seen during the last recession. (See: Home foreclosures at record high in the US)
And our failed bank de-regulation experiment…
One part of the cure for the nation’s credit crisis is transparency. We cannot work our way out of our debts until we know how much we owe. That is a simple fact. We need an absolute ban on accounting shenanigans that range from off-budget operations to fictional asset values. No more Enron-style books. Now, could someone tell those who run the country?
The Bush administration still hasn’t resolved how to account for the takeover — they say, conservatorship — of mortgage giants Fannie Mae and Freddie Mac.
Peter Orszag, director of the Congressional Budget Office, said at a news conference, “Fannie Mae and Freddie Mac should be directly incorporated into the federal budget.”
Absolutely. Only this won’t be popular because its implementation would add big numbers to an already huge deficit. The most recent CBO budget and economic forecast is for a deficit of about $407 billion this year, growing to a record-breaking $438 billion in the fiscal year that starts Oct. 1. Those numbers don’t include what it will cost to bail out Fannie Mae and Freddie Mac.
The simple fact of the matter is that Republican leadership and economic policy and international policy has led us directly to the place where we currently find ourselves.
Read on for the full story and understanding where the money went….