In yet another sign that the looming American debt crisis is close to spiraling out of control, February’s monthly federal deficit was the highest ever recorded — $229 billion, according to a report released last Wednesday by the Congressional Budget Office. Even more alarmingly, five months into this fiscal year (which began October 1, 2011), the deficit has already exceeded half a trillion dollars, with the government having to borrow 42 cents of every dollar spent during that same span.
February also marks the 41st straight month that the federal government has run a deficit, another gloomy record. The previous record streak was 11 straight months.
President Obama’s proposed budget, released last month, estimates the annual deficit for the current fiscal year (2012) at $1.327 trillion. Over the next decade, Obama's budget envisions a series of annual deficits below $1 trillion — as high as $901 billion in fiscal 2013 and as low as $575 billion in fiscal 2018. Of course, the annual deficits must be added to the national debt, and for the 10-year period 2013-2022 the Obama budget forecasts the combined deficits at $6.684 trillion. And we suppose that the forecasting in the Obama budget is wistfully optimistic, given current rates of government spending. With the debt-to-GDP ratio already north of 100 percent for only the second time in U.S. history (the first being the end of World War II), the United States is not far away from completely (for us) uncharted terrain. Read More