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Tom Toles on debt 040709 washington post

Funny how we can kind of carry on as usual around the trillions of dollars of debt that surround us.  In yesterday’s Monthly Budget Review of the Congressional Budget Office were some pretty scary numbers that hardly caused a pause over our coffee… (Yes, I know it’s “recess” around here…)

CBO estimates that the Treasury Department will report a deficit of about $953 billion for the first six months of fiscal year 2009, $640 billion more than the deficit recorded through March 2008. That estimate of this year’s deficit to date includes outlays of about $290 billion for the Troubled Asset Relief Program (TARP). Although the Treasury has been recording most spending for the TARP on a cash basis, CBO believes that the budget should record the program’s transactions on a net-present-value basis adjusted for market risk. Using that approach, CBO estimates that outlays of $140 billion should be recorded for the TARP through March, which would yield an estimated deficit of about $803 billion for the first half of the year.

Note that CBO currently estimates TARP at a net cost of slightly less than half of the cash outflow/increase in debt ($140 bil/$290 bil)–a view that has grown increasingly pessimistic since TARP was first signed into law last October.  (Two months ago CBO estimated the ratio of net cost to cash outlay at just over one-fourth, and in November they estimated the ratio at less than 15 percent.)