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Jefferson Quotes on Debt and CBO's 2012 White House Budget Analysis

Anthony Randazzo
March 22, 2011, 2:45pm

CBO's preliminary analysis of President Obama's budget proposal is out this month and it has a sharp critique: 

According to CBO's projections, if all of the President's budgetary proposals were enacted, they would add $26 billion to the baseline deficit for 2011. As a result, the 2011 deficit would total $1.43 trillion, or 9.5 percent of gross domestic product (GDP). In 2012, the deficit under the President's budget would decline to $1.2 trillion, or 7.4 percent of GDP, CBO estimates. That shortfall is $83 billion greater than the deficit that CBO projects for 2012 in its current baseline. Deficits in succeeding years under the President's proposals would be smaller than the deficit in 2012, although they would still add significantly to federal debt. [...]

Federal debt held by the public would double under the President's budget, growing from $10.4 trillion (69 percent of GDP) at the end of 2011 to $20.8 trillion (87 percent of GDP) at the end of 2021.

The emphasis added is mine, and it is to point out the blatant disregard for fiscal responsibility with this budget. This is not to say the GOP has the answers instead, only to point out that the White House, for all of its talk about needing to manage public resources well, continues to spend, spend, spend. 

American debt downgradeWe covered this in Issue No. 2 of Ahead of the Curve earlier this month, looking at projections of debt and how that might impact credit rating of federal debt issuance down the road (see figure 1 on the right). 

And while on the subject of debt, here are some great Thomas Jefferson quotes from the 1800s that prove sobering:

David Godow also covered the CBO analysis on this blog earlier today.

Anthony Randazzo is Director of Economic Research

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