Red Ink Watch: Soaring Deficit

" Is still flowing in Washington with the OMB and treasury announcing just moments ago that the budget deficit soared. To a record one point four trillion dollars. For 2009 fiscal year as in line with estimates from the Congressional Budget Office. That -- hold taken as a former director of the Congressional Budget Office in the current president and C aging consulting. He also served of course is economic adviser during senator McCain's run for the presidency is always great talking about both good to see if there. Happy to be here. Well I gotta -- it these numbers are pretty staggering -- blunt plain -- everybody we are now spending much more than were taken -- to the tune -- one point. 417. Trillion. Dollars does that number surprise you at all."

" Well given that the Congressional Budget Office had given us -- pretty good heads up last we are so no this is about we expected but. I do think it tells us that some things that are that are of importance and one of them is that even though a lot of this expenditure was one time expenditure for finding out we're not getting much -- money that just yesterday the administration announced that. They'd found 30000 jobs that the stimulus bill had created. At a cost of sixteen billion dollars that's almost half a million dollars job."

" We'll protect you know here's the thing I mean is not just this that fiscal 2009 here that's a little bit troubling the ten year forecast. Nine point 05 trillion that's the ten year forecast for the deficit. These are staggering figures that it and you have to make your argument this is going to be passed on to our children our grandchildren."

" Unmistakably we are handing our children terrible that at this point I think the most troubling aspect of the situation is not this year where. All sorts of economic distress and special. Factors played into it. But that if he rolled out the clock forward ten years we're still running one trillion dollar deficits. And a vast majority of that deficit will be the borrow to pay interest on previous borrowing so. That's not a course the United States should taken it's very important action for congress administration this -- different."

" Half -- right you know you advised former President Bush. Of course you advise us Senator McCain is -- president that tell you and I met the first place what would you say. To this president right now as he's dealing with these massive numbers and this deficits."

" I think that the forecast ten years down the important thing by that time. The the recession in the financial crisis center and probably in the Bush Administration will be distant memories -- no longer be able to point of those factors instead. We will have a budget that is raising an above average amount of revenue on 90% of our our national income. But spending an extraordinary amount of income something that looks like 25%. Of national income shot. We need to change cap on spending this president needs to understand there are limits to the amount that the government can spend and start making some tough choices but."

" But the president will say he's -- this many times already in front of the cameras. I inherited this problem but if you look at oh wait the deficit -- only only 454 billion dollars frankly. Wars in Iraq and Afghanistan a recession the Wall Street bail out which of course did begin. And the previous administration I mean a lot of this was handed over to this president. A fair enough but still these new spending programs coming out do you think that -- what would you do would you. Would you not reform health care at this point would you would you say okay we need to scale back in Afghanistan in what would you set. What top."

" He must have some priorities you can't do everything and I think the fair criticism of this administration is they're trying to do too much. You you must do those things in Afghanistan and Iraq secure. -- nation against. Forces of terrorism. But you don't have to do to health care bills that are on capitol right now they aren't real health care reform. They're large new entitlement programs that will in the end make the problem we learned about -- even worse in the future. And and we need to start making some strong strong stands in places where it's important but letting other things go to the site we cannot do everything."

" I would talk to my academic friend here Douglas produced a moment occasional psychotic college critical good to go back to. Globally worldwide and our place in the UND world economy at this point we've seen a lot of pressure on the dollar. We're seeing strengthening and the Chinese economy in the Chinese market. Do these deficits further hurt us as a country. On a global scale."

" Yes they they eat into the saving and investment which is the seed -- of our future prosperity. And US international strength is built on a strong economy its ability to to project. Military force on sadly necessary it's diplomatic stature it's trading relations are all built on that so. We are threatening our international capacity and financially. What we're doing two things that are very simple where we're borrowing from people who do not share our values reflexively. And we are allowing the dollar to come under assault so it's time to do the things at home which will firm up the foundations the economy and and get those. In in a stronger position and then the dollar which prices fundamentals man wolf will firm up as well."

" Douglas Holtz you can have DHC consulting -- like the name that was great to see you again."