Paging Ken Rogoff: CBO Revises Budget Deficit Higher By $1.2 Trillion, Says In 2020 Debt Will Be Over $20 Trillion, Debt-To-GDP At 90%
It's Friday after the close - time for the government to sneak one past traders, who are already on their fifth moqito. And sure enough, the bomb today comes from the Congressional Budget Office:
The CBO, in an annual analysis of the White House budget proposal, said today that under Obama’s plan deficits would never shrink below 4 percent of the economy between now and 2020. The cumulative deficits would total $9.76 trillion, and debt held by the public would amount to 90 percent of the nation’s gross domestic product by 2020, the CBO said.
And guess what: this is a huge deterioration from the previous budget deficit presented just a month ago:
Those figures are all higher than the administration
estimated last month when it said its budget would cut the
deficit to as low as 3.6 percent of GDP, with total shortfalls
over 10 years totaling $8.5 trillion. The publicly held debt
would grow to 77 percent of GDP in 2020, under the
In other words, the CBO has just confirmed that America has, at best, 10 years before it is officially bankrupt. That's about 9 years of multi-trillion bonuses for Goldman Sachs. Congratulations fellas.
Here is how the budget deficit will look like pre and post the revision.
Full letter from the CBO below, which should prompt China, Japan and the UK, to hire Akin Gump immediately create a creditor committee in advance of America's upcoming bankruptcy post haste. Luckily, neither will this happen, nor will anyone remember any of this news by Monday when the machines will be back in charge gunning the Dow to its new home, north of 36,000.
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