This article is mind-blowing. These mid-session review numbers are outrageous and does not look good for those of us graduating soon to get jobs that pay well, let alone jobs!
The mid-session review, increased the White House estimates of America’s cumulative ten-year deficit by almost $2 trillion to $9.05 trillion. Federal debt will reach 77% of GDP in 2019, up from 41% in 2008. America’s public finances show no sign of recovering to a sustainable level in the future. The average deficit over the next decade is now expected to be 5.1% of GDP, rather the 4% in the original budget. Even in 2019, the last year of the forecast period and after the crisis, a deficit of 4% of GDP is still expected. Production is expected to rise by only 2% in 2010, rather than the 3.2% in the original budget, while the unemployment rate will peak at 10%.
Obama says that controlling health-care costs is a big part of the long-term fiscal solution but other spending cuts and higher tax revenues will also be vital. Otherwise, America’s depressing budget figures will get even worse.
2 comments:
This article is an eye-opener into America's budget situation. But what bothers me even more is that the numbers used to build the budget were so unrealistic in the first place. A rise in output of only 2% is very different than the rise of 3.2% that was predicted in the original budget, for example. This leaves me wondering how far off the numbers used in this mid-session review are, particularly since the CBO has predicted unemployment to be 9.1% in 2011, significantly higher than Obama's expected 8.6%. This is definitely scary for those of us graduating soon, causing me to think that we may be in for even worse than expected!
I agree with you Christina...I am always skeptical reading these articles ever since I had to do an economic forecasting project. Is it me or were things like unemployment rate supposed to be decreasing? Everyone has different predictions so I am never sure what to believe. On top of that, the issues being brought to the table with the health care reform...if this will be successful for a long-term fiscal solution. Hopefully we see faster growth than anticipated! I think im only one out of millions of students who are nervous about the future and our jobs.
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