US Budget Deficit to Hit over $1 Trillion in 2009

With the enormous amount of government spending transpiring, one question that is not being asked on a regular basis is how it will be affecting the national budget deficit?  CNN Money recently analyzed the current state of the governmental economy along with projections for the rest of the year, with some less than inspiring results.

In February, the Congressional Budget Office projected a $1.2 trillion deficit for this year, and that amount could grow.

What is the reason for the deficit expansion?  There are two primary factors which both relate to taxation:

• Consumer taxes are down 70% from 2008
• Corporate taxes are down 95% from 2008

With numbers such as these combined with the increased governmental spending, we are sure to see an ever increasing budget deficit through 2009. The President’s budget will, without question, dramatically increase this amount. Say the Republicans, the era of big government is back. Say the Democrats, those who doubled the country’s national debt in the last eight years should not complain about the government growing. Respond the Republicans, just because we increased the debt, that alone is not the justification to dramatically increase from there. Buckle your seat  belts American taxpayers, we are in for a seriously different kind of ride.

All that said, there will no question be aspects of both the stimulus and budget that will help pockets of business activity. Just as many companies with a homeland security focus grew rapidly in the Bush era, businesses focusing on energy and health care appear poised to be strongly supported. Homeland security guys, well you’re going to the back burner for now. But it will be interesting to watch as some of these growing companies look at ways to grow, go public, and so on. Meantime, a Republican strategist, talking about the lack of power his party now has, said on NBC’s Meet the Press just now: ”We are like eunuchs invited to a wild party at the Playboy mansion.”

Leave a comment