....EDIT....USE FISCAL YEAR 08 WHICH WAS A DEFICIT OF $1.017 TRILLION OR 7.4% OF GDP. Simple question... Tax revenues will decline under Obama due to the contracting economy. Who knows if he will be able to get tax increases passed in the first couple of years with the weak economy. Further, we know Obama will increase spending his 1st year. If anyone has any clear estimates I would love to read up on them. The only number I have seen is something close to $1,000,000,000,000 (I don't use the word trillion because I think people have become numb to it's size) in spending increases. Currently our debt is around $10,500,000,000,000. Our GDP is $13,800,000,000,000. That puts us at a debt level that is about 76% of GDP. Our debt is increasing by about $3,600,000,000 everyday. By using that number our debt will be around $11,800,000,000,000 (or 85.5% of today's GDP) without any further budget deficits . We will likely have at least a $1,000,000,000,000 budget deficit for fiscal year '09 (http://www.bloomberg.com/apps/news?pid=20601109&sid=anUDEEEP1_M0&refer=home) and we will have to borrow money to pay for that. Further our GDP will likely contract by at least a couple percent meaning we will be dangerously close to having a debt load that is 100% of GDP and it is only showing signs of acceleration. If we have out of control debt levels then that pushes the U.S. closer to a credit rating downgrade which would be an economic nuclear bomb. It's not too likely that a credit ratings agency would have the balls to do this but it becomes increasingly more likely without of control spending and debt. Anyhow, I am just trying to illustrate the importance of getting this problem under control quickly. So I ask you...will Obama be able to get deficit spending under control despite this major economic handicap he has been given?
You have to scale your question a bit - will it decrease from what it is now, what it is projected to be, etc....
as a percentage of GDP from FY '08...well i guess it would be more fair to be FY '09....i dunno which do you think is more fair?
but if it is projected to be X this year and X +2 next year, and it is only X+1 next year, do I answer yes or no to your question?
I can't imagine it decreasing. I don't think either candidate could avoid a growing deficit. It will take spending cuts and likely more tax increases.
ok so on budget deficit was $638 billion but the "non-budgeted" number was $379 billion which brought the total up to $1.017 trillion via wikipedia http://en.wikipedia.org/wiki/Image:Deficit_to_Change_in_Debt_Comparison_-_2008.png. this puts the budget deficit at 7.4% of GDP for FY 08.
As % of GDP, I predict "no" as an answer in years one and two of the four-year term. By year four, I predict a "yes" answer when compared to the last couple of years of GWB. With this economy, a decreasing GDP with huge needs of the rescue package and stimulus II... there's just no way the deficit decreases this coming year.
I say there is no way. But, I don't think it's really as important as many make it out to be. More important is that we get on the right economic track and start showing fiscal responsibility. As long as the economy is growing, money is flowing and government isn't breaking our backs, the deficit isn't as major a concern.
if these borrowed stimulus packages potentially put our govt's AAA credit rating in jeopardy does this change your mind about potential further stimulus packages? it's crazy but this time around we seriously have to consider these things.
the debt is the greatest threat to the USA. If the deficit is larger in 4 years he will have failed us.
Yes, only if banks will pay off their loans from the government within Obama's second term. I do think discretionary spending will rise under Obama. Just a hunch backed by the ****ty infrastructure we have for a 21st century economy.
Short term no, but I have hope it will be down in two years. We really need to get some surplus going to pay down the debt! Next time there is a surplus, no tax cut! Pay the DEBT!
