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→FY 2011 Budget: How Obama Should Shrink His Deficit
==== FY 2011 Budget ====
==== FY 2011 Budget ====
Obama's first two budget deficits (FY 2009 and FY 2010) were more than $1 trillion, or 9% of [[GDP]]. The [[Democrat]]ic Congress failed to pass, and President Obama did not sign, a budget for fiscal year 2011, as required by law. But the administration continued spending anyway with a deficit projected to be at least another $1 trillion again for 2011. Combined with a shrinking economy, the publicly held federal debt increased by over 20% of GDP in Obama's first two years, and was projected to increase by another 7% in 2011. Experts warned the President that deficits of this size were not sustainable in the long run because the federal debt cannot indefinitely grow faster than economic output. Eventually a greater and greater share of national income would be devoted to interest payments, until eventually the government would be forced to finance the debt through money creation ([[inflation]]) or [[default]].
Obama's first two budget deficits (FY 2009 and FY 2010) were more than $1 trillion, or 9% of [[GDP]]. The [[Democrat]]ic Congress failed to pass, and President Obama did not sign, a budget for fiscal year 2011, as required by law. But the administration continued spending anyway with a deficit projected to be at least another $1 trillion again for 2011. Combined with a shrinking economy, the publicly held federal debt increased by over 20% of GDP in Obama's first two years, and was projected to increase by another 7% in 2011. Experts warned the President that deficits of this size were not sustainable in the long run because the federal debt cannot indefinitely grow faster than economic output. Eventually a greater and greater share of national income would be devoted to interest payments, until eventually the government would be forced to finance the debt through money creation ([[inflation]]) or [[default]].
The president emphasized his proposal to freeze for three years non-defense [[discretionary spending]]. Economist Martin Feldstein observed the president's plan would not apply to [[backdoor spending]]: increases in [[mandatory spending]] programs and [[tax ependiture]]s, new tax rules that substitute for increased government spending.<ref>[http://www.nber.org/feldstein/wsj02182010.html How Obama Should Shrink His Deficit], Martin Feldstein, ''Wall Street Journal'', February 18, 2010. Retrieved from nber.org </ref>
==== FY 2012 Budget====
==== FY 2012 Budget====