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11 Nov 2008 07:54 am

A $1 Trillion Deficit??

Steve Coll doesn't want the debt to derail Obama's proposals. A snippet:

During some internal discussions at our think tank last week, about the upcoming debate over a stimulus bill to be taken up by the lame-duck Congress, I was startled to hear some colleagues who had been prescient about earlier aspects of the crisis suggest gloomily that a stimulus as large as five or even ten per cent of G.D.P. might be required before this mess is over. The economy is about $14 trillion in size, so that’s potentially more than a trillion dollars beyond what has already been expended on rescue measures. (Obama and the Democratic-led Congress are starting much smaller—about $60 billion in stimulus measures will be taken up in the lame-duck session, and then, after the Inaugural, most second-round proposals are in the range suggested by the Princeton economist Alan Blinder over the weekend; two per cent of G.D.P., or about $280 billion.) Even without a very large stimulus, Obama will likely be the first President to preside over a $1 trillion federal-budget deficit.

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