August 21, 2009: OMB Deficit Estimates
Late today, the White House Office of Management and Budget announced that it has revised its forecast for the budget deficit over the next ten years from $7 trillion to $9 trillion. That's right. Up $2 trillion with a capital TEE. That is a forecast error of more than 25% relative to the previous estimate of $7 trillion. Of course, these are only estimates. Expect the actual tally to exceed this estimate by a factor of two or more. Say hello to double-digit interest rates. As Warren Buffet wrote earlier this week in a NYTimes editorial, we risk becoming a "banana-republic economy" if we do not reign in these deficits. And that was before he learned of the additional $2 trillion
