2009’s US Federal Deficit Expected To Top $1.2 Trillion
By Markham Lee on January 8, 2009 | More Posts By Markham Lee | Author's Website
Here is sobering look at the impact the various bailouts err loans, rescue packages, etc, will have on the national budget in 2009:

Graphic courtesy of the WSJ
2009’s deficit is expected to be 7% of GDP a level not seen since WWII. The disturbing thing is that during WWII the U.S. was raising money by selling bonds to its citizens (the world’s greatest bond sale), and in the present times the U.S. will have to raise that money by selling bonds to foreigners.
When you consider that the government is typically ten steps behind the eight-ball, it goes without saying that the eventual deficit could very well be greater than what is projected, especially if the crisis (or its negative effects) extend beyond 2009. At some point the government is going to have to decide between trying to protect us from as much short-term pain as possible vs. shoring things up so we don’t have to face excruciating long-term pains in the future.
The graphic comes from a WSJ article discussing the incoming administration’s plans to combat rising unemployment, which you can read here, you can read additional coverage on 2009’s deficit from the FT here.
Disclosure: at the time of publishing the author didn’t own a position in any of the companies mentioned in this article; the ideas expressed are solely the opinions of the author and shouldn’t be viewed as financial or investment advice.
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