Confirmed: First-Half Budget Deficit $1 Trillion

As 24/7 Wall St. mentioned in an earlier post, the Federal budget deficit was nearly $1 trillion. The Treasury department issued its numbers today. CBO came out with its figures three days ago.

24/7:  “The Congressional Budget Office issued its estimate for the deficit created in the federal government’s fiscal first half, which ended on March 31. The number was $953 billion. ”

“The concern that springs from the numbers is not so much that spending will continue to increase because that will be a product of the new budget and stimulus packages and any additional TARP funds which Congress might approve. The really massive damage to the deficit will likely come on the income side of the ledger and that draws into question, once again, how much money the government can borrow.”

“At the current rate of attrition, income to the government will be off more than $300 billion in the fiscal  period that ends in September. But, the effects of unemployment being close to 10% by then and corporate earnings continuing to fall could push that number up toward $500 billion or more and that can only be remedied if the economy turns on a dime in the next few weeks and begins a nearly miraculous recovery.”

Douglas A. McIntyre