From the Congressional Budget Office’s new report, “The Budget and Economic Outlook: Fiscal Years 2009 to 2019“:
Under an assumption that current laws and policies regarding federal spending and taxation remain the same, CBO forecasts the following:
- A marked contraction in the U.S. economy in calendar year 2009, with real (inflation-adjusted) gross
domestic product (GDP) falling by 2.2 percent.
- A slow recovery in 2010, with real GDP growing by only 1.5 percent.
- An unemployment rate that will exceed 9 percent early in 2010.
And the eye-popping news, which takes the wind out of the stimulus sails:
CBO projects that the deficit this year will total $1.2 trillion, or 8.3 percent of GDP. Enactment of an economic stimulus package would add to that deficit.
In CBO’s baseline, the deficit for 2010 falls to 4.9 percent of GDP, still high by historical standards.
- USA Today, “Budget Deficit to Reach $1.2 Trillion“
- Bloomberg, “CBO Said to Project Deficit This Year Will Exceed $1 Trillion“
- Washington Post, “Obama: Trillion-Dollar Deficits ‘for Years to Come’“
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