State impacts of Obama’s budget
Posted on 02 February 2010 | by Wendy Norris | 
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President Barack Obama unveiled the proposed 2011 federal budget Monday with a fair amount of fanfare and partisan derision. But what does $3.8 trillion mean for your state?
For all the hand-ringing over the projected deficit, the Center on Budget and Policy Priorities puts the federal debt into perspective:
Reducing deficits in the short term, however, would undercut the fragile economic recovery. Policymakers should tolerate large deficits over the next several years in order to maintain strong aggregate demand until the economy is back on its feet. Moreover, they can take comfort in the fact that temporary measures intended to aid recovery add very little to the long-term deficit problem. The increase in deficits for several years pales in comparison to the size of the economy over the long run.
Bottom line? Comparing the federal books to your own household cash budget is not an apt comparison unless one considers personal mortgage, credit and student loan debt in the equation. In that case, we’re all underwater between revenue and debt. Willing to give up your house, education and transportation because it exceeds your income? Thought not.
Find more analysis on the proposed federal budget and a podcast with CBPP’s Robert Greenstein on what the president’s priorities mean.
