Obama said Tuesday the deficit appears on track to hit $1 trillion soon. Speaking to reporters after meeting with top economic aides, Obama said: “Potentially we’ve got trillion-dollar deficits for years to come, even with the economic recovery that we are working on.”
He wants Congress to approve a stimulus plan of about $775 billion.
The federal deficit was about $455 billion when the last fiscal year ended on Sept. 30, 2008.
So Obama plans to double the deficit his first year in office, and leave it there for years to come. We’ve tried all four combinations in recent years, and it seems the only way to get fiscal sanity is with a Democratic President and a Republican Congress. Well, let’s get right on that.
POSTSCRIPT: I may not have actually written it here, so let me write it now. The stimulus plan will not work. Why? Because Keynesianism is just plain wrong today. Keynesianism applies in the extremely rare circumstance that there should be deflation, but wages fail to fall. Arguably, this applied during the Great Depression, which is what Keynes was trying to explain. It does not apply today, nor will it ever apply with a remotely competent central bank. Obama’s stimulus package will not stimulate anything; it’s just a trillion-dollar boondoggle. But, the economy will probably recover anyway, and the stimulus will probably be given the credit.
UPDATE: The trillion dollar deficit only lasted two days. Now it’s $2 trillion.