Yesterday, The Wall Street Journal came out with a story titled “A Decade of Debt” that can be found at this link:
http://online.wsj.com/article/SB125119686015756517.html
It discusses the latest 10-year budget projections that amount to a cumulative addition of $9 Trillion in debt.
I would like to briefly comment on this latest budget projection:
- As seen in the article, there are no projected budget surpluses throughout the entire 10-year period.
- Historically (at least the last couple of decades) these projections always seem to be too optimistic – meaning that the deficits realized are usually higher than planned. I wouldn’t doubt this to be the case for this budget as well. The economic projections of the last budget were criticized as being too optimistic, and as seen in the chart indicated in this article, economic projections to 2012 assume a very favorable economic climate including robust GDP growth and low inflation.
As well, an additional issue is presented, one that I have commented on as recently as my post of August 21. There seems to be a “growing insensitivity to higher deficits and debts.” No one seemed especially surprised or aghast upon release of these numbers. It appears that as time goes on, ever-larger deficits and debts seem to “legitimize” even larger deficits and debts, to the point where even a Trillion dollars, once inconceivable as an annual budget deficit, now almost seems “normal.”
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For those who may not be aware, I recently wrote an article titled “America’s Trojan Horse – A Different Look at The National Debt” which can be found listed under the Pages section on the right-hand side of the home page.
SPX at 1018.35 as this post is written