Someone Take Away The Check Book!

The Congressional Budget Office (CBO) - the objective nonpartisan office charged with analyzing economic and budgetary issues faced by the United States released a new report today. Here are two passages from Peter Orszag's blog. Orszag is the Director of the CBO.

"CBO estimates that the deficit for 2008 will be $407 billion, substantially higher than last year’s $161 billion."

"The budget deficit has risen substantially over the past year. And according to CBO’s updated economic forecast, the economy is likely to experience at least several more months of weakness. (Whether this period will ultimately be designated a recession or not is still uncertain, but the increase in the unemployment rate and the pace of economic growth are similar to conditions during previous periods of mild recession.) Finally, the Treasury and Federal Housing Finance Agency have announced significant steps regarding Fannie Mae and Freddie Mac, which carry important implications for how the operations of those entities should be reflected in the federal budget. The estimates presented in the report CBO released today do not reflect the specific details of those actions."

The $407 billion dollar figure does not take into account:

+The recent bail out of Fannie and Freddie.
+The possibility of a new stimulus package that is currently being considered in Congress
+The substantial amount of money that will be spent on hurricane response / recovery operations

$407 Billion dollars is a tremendous amount of debt - especially when considering that last years debt was $161 billion. With all of the lofty campaign promises - one has to really wonder - how will we afford all of these promises? One thing is certain, if this was a business we would be beyond bankrupt by now.

You can find the complete CBO report here.