In what should likely be a much more publicized piece of information, the Congressional Budget Office doubled the projected cost of the TARP bailout plan to $356 billion, versus an earlier estimate of $189 billion: an increase of $167 billion on the taxpayer's dime. According to the March CBO report, the total revised deficit under the Obama budget will hit $1.8 trillion in 2009 (and then never go negative pretty much in perpetuity, in other words deficit forever)
Back in October, I remember thinking for the first time, the US government might actually default on its debt some day. Since then, I've been getting more and more convinced that an event like that might be coming.
But that's crazy, isn't it? The United States defaulting on Treasury debt? That would be financial market apocalypse.
Here's the thing. These enormous trillion dollar deficits are estimates, and the CBO always way underestimates what the government will actually spend.
The initial outlay of TARP 1 was double what was budgeted. That was the first of 3 Congressional spending packages that are unprecedented in size.
The government used to exceed its budget by a couple hundred billion and we'd get a deficit. Now the government is budgeting that it will run a multi-trillion dollar annual deficit. How badly will it miss the mark?