Tuesday, June 16, 2009

Obama frets on debt, sees U.S. unemployment rising

Reuters | Washington Post
Tuesday, June 16, 2009 5:50 PM


WASHINGTON (Reuters) - President Barack Obama said on Tuesday that worrying about the U.S. government's finances "keeps me awake at night" and the country needed to start planning now to tackle soaring deficits.

In a pair of interviews on CNBC and Bloomberg television, Obama defended increasing government spending to prevent the recession from worsening, and warned the unemployment rate may hit 10 percent this year, a level not seen since 1983.

"There's no doubt that we've got a serious problem in terms of our long-term deficits and debt," he told CNBC. "I make no apologies for having acted short term to deal with our recession."

But he said once the recession ends, "we're going to have to close that gap between the amount of money coming in and the amount of money going out."

The Congressional Budget Office estimated on Tuesday that the federal deficit would hit $1.43 trillion in fiscal 2010 under Obama's budget plan, slightly higher than it had previously forecast.

Obama said unless the United States can contain its long-term debt and deficits, foreign investors may shun U.S. assets, driving up borrowing costs for the government as well as households and businesses.

[isn't it sort of too late to be worried about debt?]

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