Wednesday, February 18, 2009

The deficit


You might think that this chart from mid-January is a worst case scenario but then you have to realize that the stimulus package was actually underestimated by $12 billion and it doesn't have a provision for the newly announced $75 billion [edit: actually it turns out it's $275 billion] housing bailout. In any case there can be little doubt that we are in for the Mother of All Deficits.

You'll notice that in short order with the stimulus and housing bailouts that Obama is making Bush look like a miser. While you can argue that Obama's hand has been forced because of the recession, take a look back at previous recessions such as 1991 and 1981-82 (during which we actually had higher unemployment) and you don't see deficits even remotely close to current levels.

Not sure about the hope part, but this certainly represents change...