Image by cliff1066 via Flickr
By BRETT ARENDS
President Obama's latest budget makes a pretty good case for investing some of your money in foreign currencies, a gold fund, or both. Nobody knows for certain what's going to happen next, but there is a real danger these yawning federal deficits will lead in due course to a fall in the dollar, surging inflation, or both.
The headline numbers released Monday were bad enough. The president now forecasts a budget deficit of $1.84 trillion this year, falling to $1.26 trillion next year and $512 billion by 2013. We have become inured to federal red ink over many decades, but even by modern standards these numbers are simply staggering. From 2009 through 2019, White House documents say, deficits will raise the national debt by $8.9 trillion.
Thirty years ago, the national debt was about one third the size of the U.S. economy. By 2011, admits the White House, the gross debt will be over 100%.
Yet even these figures don't tell the full story. Even to keep the red ink to these levels, the president is relying on some optimistic economic projections.