James Pethokoukis

The U.S. budget deficit is even worse than you think

August 25, 2009

Oh yes, America’s fiscal situation is a dreadful mess.

The White House says the federal government will run a $9 trillion budget deficit over the next decade. As a percentage of the total economy, the United States looks to have an astounding debt-to-GDP ratio of 11 percent this year, with that number declining to around 4 percent from 2015 though 2019. And total debt held by the public will rise to 68 percent of GDP by that year versus 33 percent in 2001.

Obama: 64 percent of budget deficit is my handiwork

August 25, 2009

From the Office of Management and Budget:

The Administration contemporaneously acted to address the financial crisis and get credit flowing again through the Financial Stability Plan, and worked to help homeowners facing foreclosure through the Homeowner Affordability and Stability Plan. In addition, the Administration took action to forestall the failure of two of the Nation’s largest automobile manufacturers and to strengthen the non-bank credit market. All together, these efforts—along with the ARRA—increased the deficit in the short run. In fact, 64 percent of the current deficit is directly attributable to rescue and recovery efforts and other countercyclical programs that were essential in preventing a deeper and more costly recession.

What would the deficit be if McCain were president?

August 25, 2009

Bruce Bartlett, who has a new booking coming out, was nice enough to run some budget numbers so I wouldn’t have to:

Budget deficits may be twice as bad as White House is predicting

August 25, 2009

More to come on this, but the WH is predicting that as a percentage of GDP, annual budget deficits will decrease to around 4 percent over the next decade from 11 percent in 2009. Or will they? The Congressional Budget Office has some doubts (via the Director Doug Elmendorf’s blog):

Obama to renominate Bernanke as Federal Reserve chairman: a few thoughts

August 25, 2009

And once more, another person in Washington involved with helping create the financial crisis gets to keep his job. In a bit of a  summertime surprise,  President Obama has renominated Ben Bernanke as Fed chairman.

Are Obama’s healthcare troubles actually a good thing?

August 24, 2009

Mickey Kaus gives his theory:

It’s easy to forget that, even if Obama’s health care effort is bogging down, the effort itself still serves his presidency as a crucial time-waster, tying up Congress and giving him a reason to postpone (or the public a reason to ignore) those other divisive, presidency-killers. Obama needs some excuse for putting off unpopular Democratic demands; health care’s a good one. If he keeps failing to pass health care until spring, that might not be such a bad outcome. In fact, even quick passage was maybe never in his interest. There are things more unpopular than struggling. … Cap and trade, immigration legalization, “card check”—these are not what you’d call confidence building appetizers leading up to the main course of Obama’s presidency.

How Obama could prevent a second recession

August 24, 2009

Is the light at the end of the tunnel an oncoming train? That’s the worry of many economists who fret that after a couple of quarters of moderate growth, the U.S. economy will either lapse into a state of torpor or relapse into recession. In a new Financial Times op-ed, Nouriel Roubini says that weak labor markets, weak banks, weak consumers, weak profits and weak trade creates a strong risk of just such a “W-shaped” economic scenario.

White House: 10-year deficit up $2 trillion to $9 trillion

August 21, 2009

My Reuters colleagues break the news that the White House is revising upward its ten-year budget forecast to $9 trillion from $7 trillion:

‘Wee weed up’ (thanks Obama!) about some things and not others

August 21, 2009

Things I am “wee weed up” (which I think means “agitated”) about: the long-term budget deficit, the Long Recession, the state of U.S. competitiveness, the cancellation of “The Sarah Connor Chronicles” (now and forever!),  breaking my Kindle by putting my elbow on the screen and then leaning my full 205 pounds on my elbow (I mean, Amazon never said “not” to do that),  Washington humidity, not being at Jackson Hole, health exchanges, the housing market, Rick Schroeder in “24″ in season six (currently watching on DVD via NetFlix), my six-day summer cold,  my commute which is even slower in the summer (something about “hot” rails, the Cubs falling out of the pennant race (now and forever, apparently) …

GOP uses Dem playbook to kill healthcare reform

August 19, 2009

What’s good for the donkey is good for the elephant — or at least as politically effective.