27
Aug
03

Forbes.com: The Deficit–How Big?

Forbes.com: The Deficit–How Big?: “While Democrats and Republicans traded charges over the deficit in predictable ways (Democrats calling President George Bush’s policies irresponsible; Republicans saying it’s all quite manageable), more unusual is the IMF sticking its nose in. The international bank is set to reproach the U.S. for being too optimistic in its assumptions on government spending and revenue, and lacking a coherent budget plan, according to Reuters. The IMF draft report also says that the U.S. lacks ‘a medium-term concept to consolidate budgets and reform the social insurance system.’ ”

But within the U.S., there is a sharp dispute as to where the deficit will be in five years, with the White House saying it will decline to just $62 billion. The CBO says it will be close to $200 billion, or just over $300 billion if recently enacted temporary tax cuts are made permanent. Some private-sector analyses have basically concurred with the CBO analysis. Goldman Sachs (nyse: GS – news – people ) projects $4.5 trillion in deficits. Economists at Citigroup (nyse: C – news – people ), Merrill Lynch (nyse: MER – news – people ) and Credit Suisse First Boston all told Bloomberg News they don’t see a government surplus returning any time in the next decade.

Looks like the Bank is about to call-in our loans. Even they can see the White House doesn’t have a clue.

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