Bloomberg and AP reported this week that the Obama Administration’s latest budget outlook, scheduled for release next Tuesday (same day as CBO’s summer update–watching the PR and press that day will be interesting), will show that they expect the fiscal year 2009 budget deficit to come in $262 billion lower than they predicted in May–at “only” $1.58 trillion, or 11.2 percent of GDP. Cause for celebration? Well, only if you don’t mind “premature celebration.”
Both articles point out that a $1.6 trillion deficit is not really qualitatively different from a $1.8 trillion deficit (both are “humongous”). From the Bloomberg article (by Brian Faler and Roger Runningen):
The deficit figure, as revised, would amount to 11.2 percent of the nation’s economy, the official said. That would be the biggest share since 1945.
“It’s better than we expected but it’s still a huge deficit,” said Stan Collender, a...