The New Media Journal | Federal Government Will Borrow 40% of the Money It Spends in 2010

The New Media Journal | Federal Government Will Borrow 40% of the Money It Spends in 2010: According to the Obama administration’s mid-session budget update, the federal government will have to borrow nearly 40 percent of its total expenditures in 2010, a level not seen since World War II.

The report, “Mid-Session Review, Budget of the U.S. Government, Fiscal Year 2010,” shows that 39.9 percent of all federal income will be borrowed, making borrowing the single largest share of revenue in 2010. The next largest component of federal revenue is the personal income tax, which accounts for only 27.3 percent of federal funds.

This is only slightly lower than in 2009, when the federal government borrowed 43.3 percent of the money it has spent so far. The 2009 fiscal years ends Aug. 31, 2009.

The 2010 figures are estimates, based on current policy proposals which have not all been enacted yet. However, all new spending proposals, including spending from initiatives such as health care reform and a proposed cap-and-trade program, would be added to the 2010 deficit.

The revised budget estimates mean that the government will be borrowing the largest share of federal spending since World War II, when the federal government borrowed 62 percent of the budget in 1943, at the war’s apex. Borrowing, however, dropped off quickly after the war, falling to 28 percent in 1946 – with the government running at a surplus by 1947.

That does not seem to be the case this time, because Obama administration projections show the borrowed share of the budget staying at Cold War levels until 2019, when government will borrow 17.3 percent of its budget.