Just In: Deficit Will Top $1.4 Trillion in 2010, 2011
Seems like a classic Friday news dump:
A new White House forecast predicts that the federal budget deficit, which hit a record $1.4 trillion last year, will exceed that figure this year and again in 2011.
The $1.47 trillion budget gap predicted for 2010 -- when 41 cents of every dollar spent by the federal government would be borrowed -- represents a slight improvement over the administration's February forecast. The estimated gap for next year, $1.42 trillion, is larger than what was predicted in February, primarily because of a drop in expected tax receipts from capital gains.
Not surprising -- and for Keynesians, not necessarily bad news. This is what recessions do, and we always suspected that this year's deficit would be higher than 2009. But once again, it's just strange that the administration keeps talking about tightening its belt when the belt is very clearly looser than ever.