Iraq may be the termite in America's cellar

[dArKeR]

 By Bloomberg

President George Bush's request for $87-billion in emergency spending in Iraq and Afghanistan may push the 2004 American budget deficit as a percentage of the economy to its highest level since Ronald Reagan was president, economists say.

Next year's federal budget shortfall may reach a record $553-billion, according to the average estimate by eight of the 22 primary US government securities dealers that trade with the Federal Reserve Bank of New York.

That would put the 2004 deficit at 4,8 percent of the gross domestic product, the highest since 1986, based on congressional budget office estimates the economy will be $11,4-trillion next year.

http://www.iol.co.za/index.php?click_id=3&art_id=vn20030911081000962C864812&set_id=1

[ayeshahaqqiqa]

1. See thread about Krugman on NPR

It's a couple of threads above this one. Krugman says that gutting the economy is Bush's plan-then he can deep six those pesky programs like Social Security and Medicare.

[modrepub]

2. Two points

First:

Ok, so we're overspending by 4.8% to get growth in GDP of 2-4%. Does anybody else think this is a problem?

Second:

If the government does not have enough bids to cover their bond issue, does it matter what percentage of GDP the deficit is?