Recession and Recovery

The U.S. budget deficit will swell to a record of almost $1.2 trillion in 2009, congressional forecasters predicted Wednesday, and that's not counting an economic recovery package that could run near $800 billion over the next two years. With unemployment rising, not taking bold action to end the recession would be even worse for the country, Senator Bernie Sanders has said. The deficit forecast came from the Congressional Budget Office, which also projected that unemployment would go to 8.3 per

The U.S. budget deficit will swell to a record of almost $1.2 trillion in 2009, congressional forecasters predicted Wednesday, and that's not counting an economic recovery package that could run near $800 billion over the next two years. With unemployment rising, not taking bold action to end the recession would be even worse for the country, Senator Bernie Sanders has said. The deficit forecast came from the Congressional Budget Office, which also projected that unemployment would go to 8.3 percent this year and 9 percent in 2010. The latest monthly unemployment report is due out Friday from the U.S. Labor Department. Sanders met Wednesday with Rep. Hilda Solis, President-elect Barack Obama's choice for labor secretary.

The new budget office report belied claims by President Bush that the government would balance its budget by 2012.

Another CBO report issued two days before Christmas delivered up a final report card on the Reagan era, the last period of huge deficits and failed trickle-down tax policies.

"Americans in the overall top 1 percent, the 2007 CBO data showed, did quite well in the Reagan era's first quarter-century. Their average incomes, after taking inflation into account, essentially tripled, rising 201 percent," according to an analysis by Sam Pizzigati.

The incomes of the top 0.1 percent of Americans from 1979 to 2005, rose a staggering 294 percent after taking inflation into account. The top 0.01 percent did even better. The 11,000 households in this rarified air took home an average $35.5 million in 2005, a 384 percent increase over average top 0.01 percent incomes in 1979.

For some perspective, according to Pizzigati's summary of the budget office data, between 1979 and 2005, the average income of America's statistical middle class — the 20 percent of Americans in the exact middle of the U.S. income distribution — rose, according to the CBO figures, a mere 15 percent. That's less than 1 percent a year.