Budget analysts project $1.1T federal deficit

 Fourth Straight Year Exceeding $1 Trillion…

Prepare for another year of $1 trillion-plus deficits. 

The nonpartisan Congressional Budget Office projected Wednesday that the deficit for 2012 will run $1.1 trillion, the fourth year in a row the shortfall will exceed $1 trillion. 

The projection is down a bit from an earlier estimate pegging the deficit this year at $1.2 trillion. 

The report also warned that a new recession is likely if an ongoing stalemate over tax and spending cuts continues between Democrats and Republicans. 

In its annual summertime report, the budget office said Wednesday that letting decade-old tax Bush tax rates expire and sweeping spending cuts occur in January -- which will happen without congressional action -- "would lead to economic conditions in 2013 that will probably be considered a recession."

If that happened, the economy would contract by 0.5 percent -- a gloomier projection than the budget office made earlier this year when it envisioned slight growth under that scenario. Unemployment would rise to around 9 percent by late next year if the standoff persists, the analysts said. 

The budget office's latest warning came amid a presidential and congressional election year in which neither President Obama nor congressional Republicans have shown any signs of giving ground in their protracted battle over taxes, spending and the budget. The lethargic economy and massive federal deficits are top-flight issues in this year's campaigns. 

Via: Fox News

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Great news: The US fiscal gap just jumped $11 trillion … to $222 trillion

Forget the trillion-dollar deficits for a moment.  Forget today’s $15 trillion in national debt.  The real fiscal disaster isn’t our present — it’s our future, and it just got significantly worse.  Bloomberg economists Laurence Kotlikoff and Scott Burns report that our “fiscal gap,” the measure of future liabilities to future revenue, grew by the same amount as our present public debt to reach $222 trillion.  That’s trillionwith a T:

Republicans and Democrats spent last summer battling how best to save $2.1 trillion over the next decade. They are spending this summer battling how best to not save $2.1 trillion over the next decade.

In the course of that year, the U.S. government’s fiscal gap — the true measure of the nation’s indebtedness – rose by $11 trillion.

The fiscal gap is the present value difference between projected future spending and revenue. It captures all government liabilities, whether they are official obligations to service Treasury bonds or unofficial commitments, such as paying for food stamps or buying drones. …

The U.S. fiscal gap, calculated (by us) using the Congressional Budget Office’s realistic long-term budget forecast — the Alternative Fiscal Scenario — is now $222 trillion. Last year, it was $211 trillion. The $11 trillion difference — this year’s true federal deficit — is 10 times larger than the official deficit and roughly as large as the entire stock of official debt in public hands.

Via: HotAir

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