Bad news again! The US budget deficit forecast is set to rise by $89 billion. The culprits are high unemployment claims and corporate bailouts. The new total is coming in at $1.84 trillion, up from a previous forecast of $1.75 trillion. This represents 12.9% of GDP.
With the recession in full press, federal receipts are falling, adding more pressure to the deficit targets. Going forward into 2010, the price tag is for a deficit of $3.59 trillion.
Republicans are contending that Obama's spending is sharply increasing the size of government and adding a mountain of debt to the already existing debt left by President George W. Bush.
Obama is trying to make cuts in some programs and has so far made cuts in 121 programs to the sum of $17 billion. Even these slim reductions are expected to face opposition in the Congress.
Where this is all headed is anyone's guess.
Do you believe that the US will overcome this recession and rebound this year?
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