White House Sharply Increases Deficit

This goes in the category of no-brainer. The rampant spending by the Obama Administration is going to boost the deficit by far higher amounts than the Obama Administration was willing to admit just a few months ago.

White House projections of future deficits have increased sharply, however, as the administration has recalculated its economic forecast to take into account an unusually severe recession. The White House now projects that the economy will shrink by 2.8 percent this year, grow by a sluggish 2.0 percent next year and heat up to 3.8 percent growth in 2011. Unemployment, meanwhile, is likely to climb above 10 percent in the last quarter of this year and remain there into 2010, said Christina Romer, chairman of the White House Council of Economic Advisers, who predicted an average unemployment rate of 9.8 percent next year.

As a result, government spending on social programs will continue to soar while tax collections will lag behind expectations. Instead of $1.3 trillion, the deficit in the fiscal year that starts Oct. 1 is likely to exceed $1.5 trillion, the White House said. And deficits are likely to remain elevated even after the economy recovers, averaging more than $800 billion a year through 2019, when the White House forecasts the annual gap between spending and revenue will be $917 billion.

All told, the White House predicts that the nation will have to borrow an additional $9 trillion over the next decade to finance the annual deficits, driving the accumulated national debt to nearly $23 trillion in 2019 -- or 76.5 percent of gross domestic product, the highest since 1950.

That's after trying to goose the current year deficit figures by claiming that they're not going to need $250 billion to bail out faltering financial companies.