Posts Tagged ‘budget deficit’

The United States Congressional Budget Office reported on January 7, 2009 that the U.S. would have a projected budget deficit of $1.2 trillion or 8.3% of GDP for fiscal year 2009 (from October 1, 2008 to September 30, 2009).

Less than two full months later, President Barack Obama announced on February 26, 2009, that the budget deficit would be $1.75 trillion or 12.3% of GDP (48% higher).

To put this in perspective, the article reports: “The $1.75 trillion deficit projected for this year would represent 12.3 percent of the gross domestic product, double the previous post-war record of 6 percent in 1983, when Ronald Reagan was president, and the highest level since the deficit totaled 21.5 percent of GDP in 1945, at the end of World War II.”

What great evil has the U.S. defeated in 2009 like they defeated back in 1945 (fascism) to justify such an expenditure? In fact, the deficit was nearly four times less in 2008 after the ‘war on terror’ had reached a crescendo.

For modern-day comparison to a similarly sized economy, the European Union requires that its member states limit their budget deficits to a maximum of 3% of their GDP per year, though that requirement has been broken several times. The latest projected U.S. budget deficit for 2009 will be over four times that number.

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