Bad news from CBO Director Douglas Elmendorf:
CBO estimates, in its annual summer update of the budget and economic outlook, that the federal budget deficit for 2010 will exceed $1.3 trillion—$71 billion below last year’s total and $27 billion lower than the amount that CBO projected in March 2010 when it issued its previous estimate. Relative to the size of the economy, this year’s deficit is expected to be the second largest shortfall in the past 65 years: At 9.1 percent of gross domestic product (GDP), it is exceeded only by last year’s deficit of 9.9 percent of GDP. As was the case last year, this year’s deficit is attributable in large part to a combination of weak revenues and elevated spending associated with the economic downturn and the policies implemented in response to it.
That's right boys and girls. The only year with a worse deficit in the last 65 years was last year. That's OK, at least we're not seeing half a million new jobless claims a week. Oh, wait.
This isn't unexpected, of course. Remember this chart from Heritage Foundation from the beginning of the year?
How's that hope and change working out for you?
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