The White House released its Mid-Session Budget Review on Friday, which projects that the deficit will reach $1.471 trillion by the end of this year. That's 10 percent of the US economy. In nominal dollars, it is the largest deficit in American history. As a percentage of the economy, it is the largest since World War II.
The administration is evidently expecting record deficits for years to come. The government will be another $1.4 trillion short in 2011, followed by sustained deficits that never fall below $698 billion. The national debt, which, at the end of 2008, stood at $5.8 trillion, will soar to $18.5 trillion by the end of this decade.
No matter the spending frenzy, all Keynesian hopes of revitalizing the US economy have been positively shattered. Unemployment still hovers around 10 percent with no hopes of returning to prerecession levels for at least another four years. Meanwhile, the country's mounting debt burden may well end up slowing down the recovery while the countless of market disturbing measures passed as "stimulus" already have the private sector fretting about turning a profit in the years ahead.