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.
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!
ReplyDeleteI 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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