The U.S. budget deficit will widen to a record of about $490 billion next year, an administration official said, leaving a deep budget hole that will constrain the next president’s tax and spending plans.
That's the Unified Budged deficit, which includes surpluses from Social Security (of about $150 billion/year). The real budget for what the government is doing is the General Fund
, and that deficit is somewhere between $600 billion and $700 billion.
Did you ever read Max Sawicky back when he was still blogging? He used to never be worried about deficits, basically said we could run them indefinitely. Wonder what he would have to say if he could blog now. From what I understand he can't because his current employer won't allow it.
I figure the record national debt is just a poison pill that Bush is leaving for the next administration. He wants the government to be so far in debt that the next president will effectively have his hands tied. Stuck in Iraq indefinitely, the only way to push the debt down will be to raise taxes which is political suicide these days. And forget about pushing any kind of domestic agenda, not while we're still in Iraq. This is the best case scenario for Obama.
If McCain actually gets elected then I expect things to be much worse. Seriously, if McCain is elected then hunker down for a Great Depression. It will be that bad. Hyper inflation of the dollar will be required to keep the government afloat, especially if McCain cuts taxes even further. Instead of a New Deal, we'll have a Raw Deal.
nem: I agree that the Bush mega-deficits are designed, in part, to make it harder to honor the Social Security bonds.