US deficit close to half-trillion in 2009 by Martina Janeckova

The government’s budget deficit will increase to approximately half-trillion dollars next year, according to new estimates of White House. When George W. Bush became president, he inherited a budget producing surpluses in the period of economic growth. In his first year in office, Bush pushed through a 10-year, $1.35 trillion package of tax cuts. However a recession came in 2001 and also spending to fight the war on terrorism contributed to the increase of the deficit. In 2007 the deficit was $161.5 billion. According to the estimates the deficit will hit $482 billion in 2009, which is the biggest deficit ever in terms of dollars, although several deficits were higher in the 1980s and 1990s as a percentage of the overall economy. However, neither of the presidential candidates wants to change his campaign promises. McCain intends to renew Bush tax cuts that expire at the end of 2010 and add many more for businesses and upper income people who pay alternative minimum tax. Renewing the tax cuts would cost $200 billion a year and eliminating the alternative minimum tax would cost almost as much. Obama wants to aim tax cuts on senior citizens, the middle class and working poor. He wants to spend more on health care and education too. The deficit numbers for 2008 and 2009 represent about 3 percent of the size of the economy, which is less than in case of deficits in 1980s and early 1990s. Still the new figures are so high that they may hold back the appetite of the new president to add to the deficit with new spending programs or tax cuts.

by Martina Janeckova for PocketNews (http://pocketnews.tv)

PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be kept up to date, PocketNews is everyone's way of keeping in touch with the World.<br><br><font size=2>These news are original content from young talents around the world and are selected for you by Chris Cantell.</font><br>

edited by Beata Biskova