Washington's 2009 deficit projected to rocket to $2 tln

LOS ANGELES, Jan. 11 (Chinese media) -- Combined with

already planned spending, U.S. President-elect Barack Obama's future package of

tax cuts and spending increases would push Washington's 2009 deficit to between

1.5 trillion and 2 trillion dollars, it was reported on Sunday.

This indicated that the United States "is about to

embrace an economic theory that was widely thought for most of the last

generation to have been discredited: the idea that great bursts of

deficit-funded government expenditure can jolt an economy back to growth," the

Los Angeles Times said.

"The nation is poised to put this theory to the test

on a scale untried in peacetime by any developed country on Earth," said the

paper.

This also showed that how quickly the options for the

next government were shrinking, the paper noted.

Only during World War II did U.S. government

expenditures account for a greater share of economic activity, according to

federal statistics. That's also true for virtually every other developed

country.

In the eyes of the upcoming administration, deficit

spending on a grand-enough scale can inspire the confidence to right a sinking

economy, the paper noted.

Such a huge deficit would be more than 10 percent of

the economy's output.

"There's been nothing of the magnitude of what the

incoming administration is contemplating -- certainly not as intentional policy

-- in the modern era," Adam Posen, deputy director of the Peterson Institute for

International Economics in Washington, was quoted as saying.

The sheer size of Obama's plan and the considerable

support it is generating among economists as well as the public are testament to

the frightening dimensions of the global economic plunge 每 and to the fact that,

to date, efforts by government policymakers have done little more than slow the

fall, the paper said.

"Obama's plan represents an unexpected comeback for

the ideas of the late British economist John Maynard Keynes, who argued in the

1930s that governments could end the Depression by spending heavily to maintain

demand for goods and services until frightened consumers and damaged businesses

gained the courage to resume buying and selling on their own," said the

paper.