White House projects bigger deficits, bigger debt

finance.yahoo.com...

WASHINGTON (AP) -- The federal government faces exploding deficits and mounting debt over the next decade, White House officials predicted Tuesday in a fiscal assessment far bleaker than what the Obama administration had estimated just a few months ago.

Figures released by the White House budget office foresee a cumulative $9 trillion deficit from 2010-2019, $2 trillion more than the administration estimated in May. Moreover, the figures show the public debt doubling by 2019 and reaching three-quarters the size of the entire national economy.

Obama economic adviser Christina Romer predicted unemployment could reach 10 percent this year and begin a slow decline next year. Still, she said, the average unemployment will be 9.3 in 2009 and 9.8 percent in 2010.

"This recession was simply worse than the information that we and other forecasters had back in last fall and early this winter," Romer said.

The grim administration projections came on a day of competing economic news. The Congressional Budget Office, which has predicted less economic growth than the White House in the past, was also scheduled to announce revised budget projections on Tuesday.

Obama himself may have drowned out the rising deficit news with the announcement Tuesday that he intends to nominate Ben Bernanke to a second term as chairman of the Federal Reserve. The Bernanke news could neutralize any disturbance in the financial markets caused by the high deficit projections.

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There appears to be no way out of this hole the US has gotten herself into. Spending like a drunken sailor to solve a credit & liquidity crisis is akin to giving a junkie more drugs to cure their addiction.

I agree.

I guess it is beyond the governments comprehension that bankruptcy exists for a reason. Usually people use it when they are so far in debt there is noway for them to pull themselves out.

Now I know the government is a little different when it comes to bankruptcy, but the principles are still the same, and the government is at the point where there is too much debt to ever begin to think about getting out of.