Yesterday, the Congressional Budget Office released its Monthly Budget Review, complete with updated deficit figures. The short version? The budget's in some serious fiscal pain; it's just not quite as bad as last year's. With just one month to go in the 2010 fiscal year, the U.S. has already rung up a $1.3 trillion deficit. If there's good news, it's that that figure is down slightly (about $70 billion) from the same month last year. But, as the CBO points out, it's only good news when compared to last year's record-setting deficit: "Relative to the size of the economy, this year's deficit is expected to be the second-largest shortfall in the past 65 years: At 9.1 percent of gross domestic product (GDP), that deficit will be exceeded only by last year's deficit of 9.9 percent of GDP." Overall, near-term deficit estimates have grown in recent months. In July, the administration revised its projections for this year and next upwards by a total of $150 billion. Whether or not the budget's current trajectory will eventually trigger a fiscal crisis isn't entirely clear. But the more the debt grows, the more likely a crisis becomes.
Reason's Annual Webathon is underway! Donate today to see your name here.
Reason is supported by:
James Wetterau, Jr.