We have some bad financial news, and some really bad news to report.

Total Deficit or Surplus (Percentage of GDP):

The bad news is that a mid-year review from the Office of Management and Budget (OMB) estimates that the 2009 U.S. federal deficit will be $1.58 trillion, which is $262 billion less than predicted earlier in the year.  The Obama administration says this is because it is providing less financial aid than expected to Wall Street.

Unfortunately, the really bad news is the 10-year deficit projection rose to $9 trillion, while the Congressional Budget Office estimated the 10-year deficit at $7.1 trillion.  The $9 trillion figure represents three-quarters the size of the entire national economy.  Either way, our country is plunging deep into debt.

The discrepancy between the two estimates demonstrates how difficult it is to predict something the size and complexity of the U.S. economy.  What’s really scary is that the margin-of-error of these estimates is at least $2 trillion.

"Whatever their cause, the administration is very concerned about these out-year deficits, and getting those deficits under control is a top priority of the administration," said budget director Peter Orszag.

The OMB report warned that rising health care costs and entitlement programs will continue to strain the federal budget and add to our $11.7 trillion national debt.  This could hamper overall economic growth in a self-reinforcing downward spiral.  The CBO said the long-term picture poses a “threat to the economy.”

President Obama has some great ideas for change.  Here’s one to add to his list that’s surely to shock everyone in Washington:  BALANCE OUR BUDGET!

Story at FoxNews

Where were our fiscally-conservative Republicans when President Bush and the U.S. Congress took a budget surplus and turned it into a $1 trillion budget deficit, and doubled our national debt from $5 trillion to $10 trillion?

The Republican concern for fiscal responsibility in the recent budget debate rings hollow.  I think it’s clear that NONE of our elected officials on either side of the aisle have any clue what it means to balance budgets and be financially responsible.

See comic

White House officials say that President Obama will sign the $410 billion omnibus spending bill to keep key government agencies funded in 2009.  The bill contains nearly 9,000 earmarks totaling tens of billions of dollars.  Congressional members use earmarks to direct funding to unrelated pet projects.

During his presidential campaign, Obama promised to end wasteful spending, with a focus on reducing or eliminating earmarks altogether.  Many lawmakers including some key Democrats have urged Obama to veto the bill to prove he’s serious about cutting pork.

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