Good news from CBO: Deficit to reach only $1.3 trillion next year

The national unemployment rate – now at 9.1 percent – isn’t expected to drop below 8 percent until 2014, according to the report on the country’s budget and economic outlook.

This year’s budget deficit is estimated at $1.3 trillion – the third-largest in the last 65 years. And growth is projected to remain “well below the economy’s potential.” The CBO predicts that real GDP will rise 2.3 percent this year and 2.7 percent next year…

“If that higher level of spending is coupled with revenues that are held close to their average share of GDP for the past 40 years (rather than being allowed to increase, as under current law), the resulting deficits will cause federal debt to skyrocket,” the report said.