U.S. Deficit Increase Draws Controversy

“This is a deliberate, what you just saw from the President, is a deliberate attempt to bury bad news. The Bernanke announcement diverts attention from this massive increase in the federal budget deficit that we are now looking at.  It also diverts attention from the fact that the President’s previous economic forecasts have been very very wrong.” (FOX News)

The Obama administration and the congressional budget office have reported that “as a result of deeper-than expected recession” the federal budget deficit over the next 10 years would be $2 trillion higher than previously estimated.

Want to find out the difference between the national debt and the federal budget deficit? Check out: federalbudget.com

We’re taking a look at perspectives from the White House, FOX News, and CNN.

First, let’s look at the White House’s blog, where the Director of the Office of Management and Budget, justifies their position- saying this is what should be happening.

“During an economic downturn, one wants to allow the deficit to increase, so deficit reduction should be focused on the out-years – after the economy has recovered.”

An anchor on FOX News disagrees, casting the move as the White House handing Congress a blank check.  He questions what this could do to congressional spending- namely, health care.

“Another projection, and this one puts two trillion dollars back in to Congress’ pocket. Is this like found money now? Like the rest of us finding a $20 in your pocket? You figure well, I didn’t realize I had it, I might as well go out and spend it. So if these new projections are right from the CBO, is this going to put more power behind the liberals in Congress’ push to get a health care plan pushed across?”

A reporter on CNN counters that- He says the U.S. has the means to back up the deficit increase.

Obama: “Well we’re out of money now, we’re operating in deep deficits.”
Reporter: “But we’re not broke yet. That’s because our assets still outnumber our liabilities and there are still willing buyers of our debt. Some economists argue we should thus continue to run up those deficits because we’re in a recession”

So what do you think? Is the deficit a way for the U.S. government to continue to fund social programs in the global recession? Or, is this a step towards a broke America?