The deficit projected by the nonpartisan Congressional Budget Office on Wednesday is an unprecedented number of dollars. As a percentage of the U.S. economy, it would be the largest since World War II.
And the $1.2 trillion deficit is just for the budget year that began last Oct. 1.
The proposed deficit will grow even more if President-elect Barack Obama’s sweeping stimulus package is enacted. That could add nearly another $1 trillion or more to the red ink over two years.
If you add in what the federal government still owes from past years, the total national debt now stands at $10.64 trillion.
That’s roughly $37,000 for every man, woman and child in the United States. And with spending rising and tax revenues falling, the total debt is expected to approach $12 trillion by year’s end.
Yet there’s a consensus, shared by Democrats and many Republicans, that some form of major stimulus - either new spending, tax cuts or a mix - is needed to tame what is already the worst recession in a generation and to prevent it from widening into another Great Depression. Republicans generally argue for larger tax cuts as part of the stimulus brew.
“I’ve never seen harder days to be a deficit hawk,” said Robert Bixby, the executive director of the Concord Coalition, a nonpartisan group that advocates fiscal restraint.
