The Obama administration will finally admit the obvious when it releases its updated budget data: the 10-year deficit under his budget plan will top $9 trillion, $2 trillion more than the administration had been willing to admit earlier in the year.

The Obama administration has been criticized since releasing its February budget with unrealistically optimistic growth projections. President Obama predicted that the U.S. Gross Domestic Product would shrink only 1.2 percent during fiscal 2009, which began in October 2008. The economy actually shrunk 2.9 percent in the first two quarters of the fiscal year alone (at just under a six percent annualized rate), with additional shrinkage of 0.5 percent in the third quarter ending in June. With scant chance for significant growth in the fourth quarter, the Obama administration had little choice but to admit the obvious.

Just one month ago, President Obama was bragging before the whole nation in a July 23 press conference that he had cut the 10-year deficit projection from $9 trillion to $7 trillion. “If we had done nothing, if you had the same old budget as opposed to the changes we made in our budget,” Obama said during that July 23 press conference, “you'd have a $9.3 trillion deficit over the next 10 years. Because of the changes we've made it's going to be $7.1 trillion. Now, that's not good, but it's $2.2 trillion less than it would have been if we had the same policies in place when we came in.” The admission this week means he's all but acknowledged that he's made no progress toward cutting the deficit.

Obama's budget had by far the most optimistic growth projections in it compared to other projections by the Federal Reserve, the private Blue Chip index and the Congressional Budget Office, having predicted a four percent annual growth average the last three years of his presidential first term. The more optimistic the growth projections in a budget, the more deficit spending that can be temporarily sheltered in that budget. But even the telegenic Obama is learning that he can only lie with these statistics temporarily.

The deficit revision also puts Obama's health care agenda in danger, particularly after a Congressional Budget Office (whose more pessimistic deficit estimates proved more accurate) analysis that says the health care package would increase the deficit as much as an additional $1 trillion.

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danwhitehead1 said:

	I wonder - - - - - - how much personal wealth Obama has and how much he has paid in taxes.
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August 26, 2009
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hsr0601 said:

Inaction cost, $9trillion over the next decade Inaction cost, $9trillion over the next decade, can not be compared to the balance between estimate and outcome in a worst case of scenario. Time does not fix endless greed and energy depletion. When the public health is also one of commodity like a house, we come to a tragic and unthinkable conclusion : As to for-profit business, the more and longer ill patients get, the more profits they make, and it will debilitate the overall economy involving education for the future, not to mention continued bankruptcy of middle class. Of young adults ages 19 to 29, 13.2 million, or 29 percent, lacked coverage in 2007, and that implies the total of this promising reform will be cheaper than expected, I guess.

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August 26, 2009
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