$1.2 trillion deficit EXCLUDING Obama's Stimulus plan?!?!? WOW!

It is remarkable tha the Congressional Budget Office is projecting a federal budget deficit of $1.2 trillion without including Obama's expensive stimulus plan. Assuming Obama's stimulus plan costs $800 billion over two years, you are looking at deficits in the order of $1.6 trillion for the 2009 fiscal year!! Obama tells us that trillion dollar deficits are here to stay, for the coming years.

These numbers are scary!! I like to think of the gravity of a federal budget deficit as a percentage of federal revenue (as opposed to be the GDP as everyone else does). Considering the federal tax revenue is about $2.5 - 2.7 trillion, the deficit for 2009 is going to be anywhere between 44-64% of the federal tax revenue!! Imagine if you are a household spending 44-64% more than you make. How long would you survive? Not for long!! I don't think even the money-printing Uncle Sam can pull this off for too long. This country is on an unsustainable path to a devastating national bankrupcy that would wreck itself and the world as we know it.

Ok, no more doomsday talk. I am hoping all the people (think "experts") who are not alarmed by America's fiscal path have a good reason to be less alarmist. My trust in "the government" and experts has been broken, but I will have to live with them because they are the best we got. There is no certainty in this life.


UPDATE:
I was stunned with these deficit numbers that I went to alarmist mode on the Freakonomics Blog. The question was what predictions would you make about the year 2009? My answer was as follows. Obviously, it is all tongue in cheek, but the concern and pessimism is real.

China stops buying U.S. Treasury bonds, halting Obama’s grand deficit spending plans.

China stops buying U.S. Treasury bonds, leading to increased cost of borrowing for the U.S. government whose 2009 fiscal deficit balloons to $2 trillion as a result.

Many state governments default on their bond payments and file for bankrupcy.

Mexico buys back California, Arizona and New Mexico for pennies on a peso.

No buyers for the states New York and New Jersey, so they go under the custody of the federal government. Krugman claims “capitalization should have been the answer from the beginning.”

States in good fiscal shape acquire dysfunctional ones, leading to a new remapping of the U.S.

Number of states in the U.S. declines by 20% (from 50 to 40) for the first time since the Civil War.

Alaska secedes from the lower 48 and Sarah Palin gets her revenge as she becomes the first president.

Hawaii declares its independence from mainland America citing irreconcilable differences.

Cuba buys Florida and leases it to the Russians.