U.S. Deficit To Hit $1.5 Trillion in 2011!
According to the non-partisan Congressional Budget Office, the annual deficit of the United States federal government will reach $1.5 trillion in 2011, a record amount in nominal terms. More alarmingly, the CBO projection exceeds 10 percent of the U.S. GDP for the first time since the onset of the global financial and economic crisis in 2008.
Two things need to be pointed out. The CBO forecast is not a “worst case” scenario but a conservative projection, which may possibly be exceeded. Secondly, this staggering structural mega-deficit follows on the heels of several previous annual U.S. trillion dollar annual deficits, in parallel with similar ratios of government deficit to GDP in many other advanced economies.
The continuing flood of red ink is rapidly hastening a “come to Jesus” moment for many indebted economies, and a catastrophic sovereign debt crisis looks increasingly likely for the United States.