Interest Rate Roundup

Tuesday, August 25, 2009

Deficit forecast hiked to $9 trillion; Debt load to triple

The Obama administration threw in the towel on its optimistic deficit projections today. The White House is now forecasting cumulative deficits of $9 trillion over the next 10 years, compared with a previous estimate of $7.1 trillion. At the same time, the projection for this year's deficit dropped to $1.6 trillion; the improvement stems from the fact the banking sector didn't need as much bailout money as previously anticipated.

Something else that's scary to consider: Total U.S. government debt is now forecast to TRIPLE to $23 trillion by 2019. That's an increase of $2 trillion from the administration's May estimate. As a percentage of GDP, that'd be 76.5% (compared with 56% now). The debt load hasn't been this high in relative terms since World War II. More details can be found here.

2 Comments:

  • Then why are interest rates not going through the roof?? I don't understand this.

    By Anonymous Anonymous, at August 25, 2009 at 11:42 AM  

  • How did you arrive to 76% debt-to-GDP ratio for 2019? Our GDP today is around $13 trillion. We'll be lucky if it's around $15 trn in 2019, so the government debt-to-GDP will be 150% within a shouting distance from the "Japanese" territory of 200%+.

    By Blogger Alex K., at August 25, 2009 at 7:48 PM  

Post a Comment

<< Home


 
Site Meter