President Obama has released revised budget projections, and they show another record deficit for the federal budget. The budget deficit for the 2009 fiscal year was a record of $1.4 trillion, but the projected deficit for fiscal year 2010 is projected to set a new record at almost $1.6 trillion. In 2011, the Administration expects the deficit to decline to “just” $1.3 trillion.
Looking down the road past 2011, the Obama Administration projects that the deficit will steadily decline to a “low” of $706 billion in 2014 before beginning to rise again in 2015. However, many experts are skeptical about the prospect of declining deficits in future years because the Administration is using unrealistic economic assumptions to project the declining deficits. For example, the Administration assumes strong economic growth of 3.6% in 2010 and downright robust economic growth of between 5% and 6% beginning in 2011. Few economists are predicting that kind of growth.
Even using these rosy economic assumptions, the Obama Administration is predicting dramatic growth in the National Debt. When President Obama took office, the National Debt stood at $10.6 trillion. Current White House projections (using their optimistic economic assumptions) call for the National Debt to be over $16 trillion by the end of President Obama’s first term and approximately $21 trillion by the end of his second term.
Clearly, we have not entered the age of fiscal restraint when it comes to the deficit and the national debt.
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