CBO: $1.2 Trillion Deficit in 2009by Tim Manni
The Congressional Budget Office (CBO) released “The Budget and Economic Outlook: Fiscal Years 2009 to 2019″ report today. The report estimates the United States’ deficit in 2009 will reach $1.2 trillion, without including the President-elect’s planned stimulus package or any other new program.
Furthermore, the 58-page report predicts (inflation-adjusted) gross domestic product (GDP) will shrink by 2.2% in 2009, while increasing slowly by 1.5% in 2010. Also, the unemployment rate is estimated to exceed 9% by early 2010.
The fear of a growing deficit hasn’t swayed some economists from touting the new stimulus package as nothing short of necessary. Former U.S. Labor Secretary Robert Reich has predicted that without the stimulus, the U.S. is poised to lose another 3 million jobs in 2009. When the government’s unemployment report is released on Friday, Economist Mark Zandi anticipates that another 500,000 jobs were lost last month.
Despite the predictions of ongoing negative numbers, at least one market observer across the pond believes the U.S. is first in line for economic recovery:
The country will reemerge as undisputed top dog, the only one with real demographic, scientific, and strategic depth. As first into the crisis, it will be the first to hit bottom.
The numbers are in — and the American economy seems to be stuck between a rock and a hard place. While the deficit is digging us deeper each day, the unemployment scenario seems to be forcing lawmakers to ignore the problem — at least for now.
Is a stimulus package the best way to solve unemployment?