Obama: Trillion-Dollar Deficits May Last Years

WASHINGTON — President-elect Barack Obama says the nation probably faces huge deficits for years to come, but heavy spending is needed now to spur the economy.

Obama said Tuesday the deficit appears on track to hit $1 trillion soon. Speaking to reporters after meeting with top economic aides, Obama said: "Potentially we've got trillion-dollar deficits for years to come, even with the economic recovery that we are working on."

He wants Congress to approve a stimulus plan of about $775 billion.

The federal deficit was about $455 billion when the last fiscal year ended on Sept. 30, 2008.

Comments

[robinhood1]

I suspect that under Obama, the Federal deficits will be even larger, a legacy of the guns and butter economy of the Bush years. I wonder who is going to buy all the US government bonds that will be issued by the Treasury? For a country that preaches family values, the US is certainly leaving its children and grandchildren an economic mess.

[mikep]

No one's going to buy these bonds. The idea of years of trillion dollar deficits is total fantasy. It doesn't make the slightest bit of economic sense, and the rest of the world simply isn't going to buy it. But we shall see. They'd have to be insane to do it though. There's no way the US can pay back its current debts, not to mention another $5-10 trillion.

[NWBrunette]

So now would be a good time to eliminate the bush tax cuts, and drop the salary cap on social security taxes, as Obama promised during the campaign. Stop doing the easy stuff and making all our grandchildren pay for this. Stop pretending its okay for the wealthy to make our like bandits during our economic troubles and keep (not) taxing them as though we were right-wing extremist corporatist republicans. Give me a break.

[Hirnlego]

Bush has borrowed more than all previous 42 Presidents. Combined.

http://digg.com/business_finance/Bush_has_borrowed_more_than_all_previous_42_Presidents_Combined

Is there really anyone willing to borrow all that much more money?

[Michelle Styles]

Where is the out cry here now that your boy Obama has admitted to a 1.2 trillion dollor borrowing event his first year in office and he has admittted this will continue for "years to come"?

Oh wait this must be bushes fault. We all know Obama is a democrat and just can't help himself but to spend money. I mean he couldn't possibly "change" washington and make them more fiscally conservative with our money. He couldn't possible "change" washington to pass a better america to our kids. No he is going to burden them with "more of the same"

Nope my friends his change is dig us a deeper hole and put a larger burden upon our childern.

I hope this is the chnage you voted for because you'll se alot more of it over the next four years and brother you ain't seen nothing yet. And your childern will be stuck holding the bag.

The only light i see is at some point even the whacko bush haters won't be able to blame bush for Obama's mistakes and lies. While i believe bush has made some blunders of epic proportions he is not to blame for this entire mess. He inharited a country that was in a recession. Look at the unemployment numbers when bush took office, how far the stock market tunmbled, ect..

At some point the whackos of both sides will realize this government nolonger serves the people but instead we serve it.

[unite4change]

Check out what the US Chamber thinks of Main Street America:

http://www.uschamber.com/sab/default

[Peter007]

Here is an idea for a fairer tax system. Tax people when they earn their money not when they receive it. Also, tax all non-monetary benefits such as health insurance premiums and free housing and free car use. Or at least tax them at the tax rate they earned the money at.
Example. A worker makes $90,000/ yr and receives $15,000 in paid insurance premiums. Tax the insurance benefits. Why does he get tax free benefits when an unemployed worker that pays his own premiums must pay a tax.?
He also gets to retire after 20 years at $90,000/ year. If he retires at age 40. and lives to be 75. Thats an additional $3,500,000 he has made but pays tax at the lower rate of a $90,000 worker.
Since he earned his pension during the 20 yrs he worked, the value of that needs to be taxed. The 3.5 million is worth $157,000/ year. His total compensation is therefore valued at $247,000/ year but he's paying tax at a lower rate. Its a loop hole too many people enjoy. Too many well off people.

[jsarets]

I'm sorry, but I'm in my mid-twenties and I'm not familiar with some of the lingo in your comment. What's a "pension"?

[Erdgeist]

It is easy to get rid of the National Debt. Bring back the "revenue tariff" of about 15%. John Maynard Keynes proposed a revenue tariff after much thought and being against it earlier. Needless to say, it was not met with much enthusiasm by the "free traders" whose polices greatly contributed to the economic downfall of Great Britain (our own economy has been going downhill since 73 when free-trade was pushed). One the considerations for the tariff in Keynes' mind was that it would get the government out of its budgetary difficulties. The revenue from such a tariff would reduce the need for other tax increases or expenditure cuts. As Keynes put it so well, it was, "the only form of taxation which will positively cheer people up".

[rkimball]

everyone should order your children to have lots of kids when they marry & their kids to have lots of kids. that way the burden of passing on debts to our grandchilder will be spread out.

[jsarets]

Call it genetic debt securitization.

[senorlou]

If we want a more stable economy, we need to do away with health insurance companies, and for profit health companies (Kaiser, Blue Cross, etc.). We also need to stop our imperial wars that, in the end, will cost us at least $3 trillion. We also need to stop the insane tax breaks for corporations and the wealthiest among us. It would also be great if we could use retirement pensions instead of the flim-flam 401 K retirement system. The money market should only be used by people who are licensed and know what the hell they are doing. I could go on, and I'm sure some folks will disagree with me here, but our health care crisis, as well as our retirement crisis, are the biggest problems right now - aside from the war, job loss, devalued currency, etc. Lots of work to do.

[redhot200822]

What would you replace the 401K system with?
What would your healthcare system look like?

[senorlou]

Of course, you'd like me to shove it all into a neat little paragraph. We're the only post industrialized nation on earth not to have universal health insurance. Is it too much to ask that we catch up to the rest of the world? 401K is the dumbest retirement scheme of all time. You ask anyone what companies their 401K has in it, and 95% of the USA won't know. The time of money for nothing is over. You bring back the pension system, whittle down the financial "industry" which is nothing but a thieving scamming business, and knock the health insurance "business" right out into space. No more $$$$ super rich insurance agents. Time to find another job. May I recommend gardening, janitorial work, and other legitimate, though less rewarding careers. The entire health insurance "industry" is a huge financial scam foisted on the American people. Anyone working in that industry - get out of it now. It's not cool, and you know it.

[PATina]

Of course they will... but this is the only way will ever have a chance to get them down. Hopefully, all will work out as planned. By spending on infrastruc­ture... jobs will be created. W/ more jobs... mean more people paying taxes. More people paying taxes... more money coming into the Treasury. More money in the Treasury..­. more money to pay down the deficit.

[PATina]

Dang... can't type this morning... should have read...

but this is the only way WE will...

[Peter007]

Thats such a great idea. Why don't countries like Haiti and Cuba do a stimulus program?. Also, Detroit is in such a mess. I see no reason why they shouldn't borrow money, start building roads, bridges and schools and raise the salaries of all public employees so they spend their pay increase locally. Problem solved.

[ROBOT8]

THIS FALLS ON THE HANDSO F OUR CHILDREN..­......THIS IS ALSO THE WAY ROME FELL!!!!!!! JUST ONE MORE WAR AND THIS DEBT.THAT'­S PRETTY MUCH IT..

[truthforme]

Unless you are 80 years or older this will fall on OUR hands as well. Like our economy, which everyone NOW realizes was NOT sustainable, our continued deficit is not sustainable either.

[frantaylor]

It is sustainable for as long as the people who hold T-bills (foreigners) decide that they have value. If we show the world that we can get back on our feet, their value will stay up and we can maintain the deficit until our economy recovers.

[hellboundtrain]

America brought down by consecutive, consistent failures of the Bush family,
and this latest administration.

What hath thee wrought?

[957]

I've got ten acres with a deer shack on it on the south end of my property, can be fixed up for year round living, room for garden, creek running in back, plenty of trees for firewood, game in the woods, ducks in the creek, 25 lakes within 10 miles for fishing, I think I might just advertise this for sale or rent, I fear the way this "change" is starting to shake itself out the are alot of folks are going to be looking to get back to the land.

[WorkingClass]

Exactly what I'm looking for. Place an ad in "Craig List". I will give you a call.

[NoPCZone]

Better buy you some gold now while people will still take the US Dollar.

[frantaylor]

Platinum is a better bet, it's scarce and it has many industrial uses for which there is no substitute.

[Bluedrgn]

Deficits aren't the answer we don't need to further mortgage our country. Tax the rich. Especially the mega rich in the top 1%. They can afford it, and it is proven that all the extra cash doesn't buy them happiness.

[frantaylor]

Paul McCartney still lives in England despite the "1 for you and 19 for me" taxes they have there, and he is still mighty wealthy.

[NWBrunette]

Exactly. Our tax structure is so incredibly regressive and has been for decades. Taxes for the wealthy should be like they were under Kennedy. There is every reason that a rich person should be taxed on their disposable income at a higher rate than a poor or middle class person. Right now, its the complete opposite. Plus, the social security salary cap for taxes should be completely dropped and the rate for lower and middle income earners lowered accordingly.

[Michelle Styles]

the bottom 50% of tax payers already pay less than 2% of all taxes collected according to the irs. the top 5% pay 80% of the bill according to the same source.

1-50% pay 2%
51-95% pay 18%
95%-100% pay 80%

Nope those stinking rich don't pay enough you are so right!

[Bluedrgn]

I note that anytime anyone tries to make the point that the rich pay more than their fair share that they also leave out how much money they make and how much money they have.... the 95-100% may pay 80% of the taxes, but considering they make, what 90% of the money, and hold like 98% of the wealth. I don't feel sorry for them, not at all. Not when many of the bottom 50% is wondering how they are going to feed their families next month if they get laid off... or heaven forbid someone gets seriously ill/injured and you get hospital bills equal to 5 years pay.

[Lyceum]

Obama is very quickly turning into a clown and a con-artist.

If Obama thinks that this nation can withstand "trillion dollar" deficits for the foreseeable future then he is both dumb and stupid.

Obama was elected for change.

Approving massive deficits for the next 5 or 10 years will be a disaster for this nation.

Now that he is elected, Obama apparently does not have the courage to say to the American people: we cannot continue going into debt, and we must pay for the programs that we want.

Obama, if this is how you are going to lead this nation, then go back to your beach house in Hawaii, and let us fix this nation without you.

[JujuBean0586]

Lyceum -
we cannot continue going into debt, and we must pay for the programs that we want.

And who is going to pay for them, there are no jobs.

Even republican economist agree the deficit will increase, if taxes are increased now the economy will never bounce back.

Increase deficit now, increase taxes once economy recovers.

Obama was elected for change, not to snap his fingers and elimante BUSH's and the REPUBS crazy spending

[frantaylor]

Look at the history of the Great Depression and how it got started and how we got out of it, and you might want to retract what you say.

[senorlou]

Let me guess, you voted for Bush twice, right? Bush has left a massive booby trap for Obama. The economy is on red alert, two wars are being lost as we speak, and the entire world hates our guts. The economy has been set to blow as soon as obama walks in, and you can see it happening now. We're going to be a poorer nation now, no matter what we do, but maybe Obama can save us from economic collapse, which is what your lovely Republicans have put us on the road to. If Obama hadn't won that election, we'd soon be out scouring the forests for berries, grubs, and clean water. He's a miracle, and just in the nick of time. He may fail, but at least he'll try.

[DallasMike]

What is Obamas plan for this money?
What is he specificaly going to spend OUR TAX $s on?
If "Potentially we've got trillion-dollar deficits for years to come"
Then why are you not working on a package that WILL NOT leave us with trillion-dollar deficits for years to come?
You want to stimulate the Economy? then cut the capital gains tax and suspend income taxes for 6 months. This will encourage investment in bussiness and give people more money in their pockets instead of the pockets of the incompetants in Washington

[nibblybits]

I don't blame Obama (since this is Bush's fault), but increasing our national debt to such a degree could result in fiscal disaster for us. This bodes very very badly for our future.

[QuestionEveryone]

This is not Bush's fault..Fir­st Presidents have the least effect on the economy..b­ut Congress over the last 3 years, especially those favoring everyone should be a home owner, allowed Freddie and Fannie to give loans to people who should not have had them..and allowed mortgages to be bundled and sold..with­out valueing them..Cong­ress is to blame..and guess who'd controlled Congress for the last 3 years.

[greeniefromOH]

Actually, that's not true. Most economists, when pressed, will assert that the President's policies affect the economy more than those of Congress.

Read: Unequal Democracy, by Larry Bartels, for a glimpse of this.

[frantaylor]

It was Bush who stuck us with a $620 billion bill (at the moment) for the Iraq war.

[frantaylor]

Why don't you listen to Bush's speech about 'Ownership Society' and realize how foolish you sound.

[DallasMike]

Right on QuestionEveryone

[unite4change]

QuestionEveryone, I sure must know, s**t rolls down hill. If is messed up at the top, it will be messed up at the bottom. It means Bush is no different than any other CEO of a corporation, when the corporation fails, it the CEO's policies that failed the corporation.