U.S. Budget and Economy

On January 7th, the Congressional Budget Office (CBO) released its latest budget and economic projections. The report is titled The Budget and Economic Outlook: Fiscal Years 2009 to 2019 . The following graph shows the deficit under selected policy alternatives as projected by this report: The actual numbers and sources for this and the following graph can be found at this link . As can be seen, the baseline deficit (the purple line) is projected to plunge to $1.2 trillion in 2009 and recover over the next three years, stabilizing to just over $200 billion per year from 2012 through 2019. However, other means of financing will cause the debt held by the public to increase an additional $313 billion in 2008 and $204 billion in 2009. The report explains this other financing on pages 18 to 20 as follows: Federal Debt. In most years, the amount of debt that the Treasury issues roughly equals the annual budget deficit, although a number of other factors also affect the government’s nee...

On January 9th, the Bureau of Labor Statistics (BLS) released its Employment Situation report for December of 2008. Following is the opening paragraph: Nonfarm payroll employment declined sharply in December, and the unemployment rate rose from 6.8 to 7.2 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Payroll employment fell by 524,000 over the month and by 1.9 million over the last 4 months of 2008. In December, job losses were large and widespread across most major industry sectors. A number of news articles stated this to be the worst job losses since 1945. For example, a Wall Street Journal article was titled "Yearly Job Loss Worst Since 1945" and a CNN Money.com article was titled "Worst year for jobs since '45". In fact, the preliminary figures for the loss of nonfarm jobs in 2008 is 2.589 million jobs and this is the highest figure since 2.75 million jobs were lost in 1945. The following graph from the BLS...