White House Budget Deficit Rises — Again

The White House is raising its10-year budget deficit estimate from the previous gargantuan amount of $7.108 trillion to $9 trillion in a report to be released next week. The higher figure brings the White House’s previously erroneous figure in line with that of the Congressional Budget office that estimated that the deficit over the next 10 years would reach approximately $9.1 trillion.

The increased estimate is being blamed on "new data" that shows that the economic downturn was more severe than the White House had previously estimated. A White House spokesman now says, "Our budget projections are now in line with the spring and summer projections that the Congressional Budget Office put out."

Republicans have taken this opportunity to point out that Obama’s spending spree is driving budgets past the breaking point, even without the additional spending attached to his plans to take over America’s healthcare system, the energy sector, and promised education reforms. Many Americans are now asking themselves, "If I have to control my own budget, why doesn’t the government?" So far, the response from the White House has been a consistent, "Who us? We inherited this from George Bush." That response seems to be wearing thin even among the most devout Obama believers.

Many economists are worried that China and Japan may begin to doubt our ability to repay the huge debt that we are creating and either raise interest rates or stop lending to us altogether. Further, if the Fed continues increasing the money supply, then hidden tax of inflation is sure to follow with a vengeance. In the past, the government has been able make it seem as though rising costs were caused by the greedy corporations, but as Americans are forced by circumstances to become more savvy about economics, that ruse may no longer work. If the government then enacts the massive tax increases necessary to fund the interest on the debt, it will lead to an even more severe economic slowdown.

There is only one sure way to stop what appears to be certain financial disaster, and that is to curtail spending.  Most economists do not see that as a likely scenario under the leadership of the current White House and Congress.