Most red ink ever: $9 trillion over next decade

WASHINGTON – In a chilling forecast, the White House is predicting a 10-year federal deficit of $9 trillion — more than the sum of all previous deficits since America's founding. And it says by the next decade's end the national debt will equal three-quarters of the entire U.S. economy.

But before President Barack Obama can do much about it, he'll have to weather recession aftershocks including unemployment that his advisers said Tuesday is still heading for 10 percent.

Overall, White House and congressional budget analysts said in a brace of new estimates that the economy will shrink by 2.5 to 2.8 percent this year even as it begins to climb out of the recession. Those estimates reflect this year's deeper-than-expected economic plunge.

The grim deficit news presents Obama with both immediate and longer-term challenges. The still fragile economy cannot afford deficit-fighting cures such as spending cuts or tax increases. But nervous holders of U.S. debt, particularly foreign bondholders, could demand interest rate increases that would quickly be felt in the pocketbooks of American consumers.

Amid the gloomy numbers on Tuesday, Obama signaled his satisfaction with improvements in the economy by announcing he would nominate Republican Ben Bernanke to a second term as chairman of the Federal Reserve. The announcement, welcomed on Wall Street, diverted attention from the budget news and helped neutralize any disturbance in the financial markets from the high deficit projections.

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http://news.yahoo.com/s/ap/20090826/ap_on_go_pr_wh/us_obama_economy

It's cause for concern but this is one of those pet issues the media tends to superficially get into and make overtly grim, which is even more frustrating because they treat the policies that get us into these messes as viable in the first place.

Deficits, debt, and the economy
http://krugman.blogs.nytimes.com/2009/08/25/deficits-debt-and-the-economy/

It's a couple trillion below the amount he inherited, so the first sentence of the column is false.

A huge portion of the increasing deficit is due to the debt service on the $11 trillion he inherited, and virtually all of that came from Reagan, Bush I and Bush II.

Getting the deficit down requires increasing job revenues, and thereby the tax revenues, not by cutting spending, which would be self defeating.

FYI: Yahoo news isn't reliable news.

The number seems big too, but in relation to the size of our economy it's not at the level of debt that we have had before in other historical circumstances or even in other countries in the world. It looks eye popping, but it's something that is manageable because over the next decade our economy will get back to standard growth etc. It's bad, certainly not good, but it isn't something that we can't handle.

It took all of American history to ring up that $11 trillion.

guess he's kind of a hair of the dog...might seem to be perceived good for the hangover but not the alcoholism..K&R