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steven johnson Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 11:44 AM
Original message
New deficit projections pose risks to Obama's agenda
Obama has promised to cut the deficit in half by the end of his four-year term, and lowering healthcare costs are advertised as key to achieving long-term deficit reduction.

Unfortunately the latest deficit projections with the new healthcare reform project a need for tax increases. Bad news.


President Barack Obama's domestic policy proposals will face the reality of skyrocketing deficits on Tuesday when officials release two government reports projecting huge budget shortfalls over the next decade.

The White House budget office and the Congressional Budget Office (CBO), a non-partisan arm of Congress, release updated economic forecasts and deficit estimates on Tuesday, providing further fiscal fodder to opponents of Obama's nearly $1 trillion healthcare overhaul plan.


Looking forward, an administration official told Reuters the 10-year budget deficit projection will jump by about $2 trillion to roughly $9 trillion from an original forecast of $7.1 trillion.

Many economists think it is unlikely that the government can curtail spending, which means taxes would have to rise to cover the increasing costs of providing retirement benefits and healthcare to older people. That could slow economic growth.


New deficit projections pose risks to Obama's agenda
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quantass Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 11:47 AM
Response to Original message
1. Funny that when its Unnecessary Wars the Deficit is Considered Not Important but...
when it comes to IMPORTANT matters like Healthcare...now..NOW the deficit is brought into question despite it having reasonable ways to control it and long-term control costs that would dramatically reduce it (since a public option or ideally, a single payer system would be very cost effective) compared to the disaster the system is in right now
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Yupster Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 11:52 AM
Response to Reply #1
2. The problem is the scale
We're borrowing every month what the annual deficit was just 2-3 years ago.

And every projection is just going to look worse as more people draw unemployment and fewer people pay taxes as they reduce their hours, get laid off, etc.

This deficit of $ 1,800 billion a year, or projected to go down to $ 900 billion in 10 years just can't be lived with.

There's just a big difference between a $ 200 billion deficit or even an out of control $ 400 billion deficit and an $ 1,800 billion deficit.

We are this year going to borrow fully half of the federal budget. Taxes will bring in about $ 2,000 billion and we're going to spend $ 3,800 billion. Obviously this can't be done for long.
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dkf Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 11:52 AM
Response to Reply #1
3. The problem is the Repubs already seriously screwed up the finances
We don't fix the Repubs excesses by spending even more money on whatever we want.

Its like if the ex-husband spent like crazy on the credit cards, and then you get a raise and decide to buy a new car. You are still in huge problematic debt, and your raise should probably go towards getting your financial house in order, but now you get to do what you want so you indulge yourself.
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Aramchek Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Aug-23-09 11:54 AM
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4. I'm sure Obama appreciates your concern
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