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Sunday, June 12, 2011

US debt to exceed size of the economy this year

US debt to exceed size of the economy this year: "A recent Treasury report noted that national debt will exceed the size of the economy this year -- a first since World War II. A year ago, the Treasury had estimated that notorious record wouldn't be hit until 2014.
Now the expectation is that total debt to GDP will top 102 percet this year, up from the earlier estimate of 96.4 percent.
Why the change?
Two factors are likely the biggest cause.
First, the White House's 2011 GDP estimate is $219 billion lower today than it was a year ago. So debt as percentage of a lower number will always look higher.
Second, the debt grew larger because of a tax cut deal brokered by President Obama and Republicans last December. That deal will add an estimated $858 billion to the deficits over a decade -- $410 billion of it in 2011 alone, according to the Congressional Budget Office."

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