$2,000,000,000,000. That's the amount by which the Obama administration raised its ten-year estimate of the nation's budget deficit from the one it made only a few months ago. Now, $2 trillion is a lot of money. But even more significant is the fact that this revision represents almost a 30 percent increase -- no tiny percentage of the earlier $7 trillion figure. It seems that expenses are higher -- up 24 percent this year, the largest increase since the height of the Korean War -- than originally estimated, and revenues are lower. The resulting deficit, says Peter Orszag, Obama's budget director, is "higher than desirable". He might have added that the administration's critics had it right when they claimed that the earlier estimate represented a turn around the dance floor with that old seductress, Rosy Scenario.

There's worse: the new estimate assumes that Medicare and Medicaid spending will be cut by $622 billion, even though Congress has made it know that it is reluctant to make any such cut. Then there is the $600 billion in revenue included for the sale of emission permits, despite the fact that the House has given away so many permits in order to buy support for the cap-and-trade emission-reduction that the program will produce at most $450 billion. Those two items alone come to almost another trillion dollars in red ink. Throw in another trillion-plus for Obamacare, and it is no surprise that senior economist Bill Gale, at the liberal Brookings Institute, says that the

This year, the deficit will come to 11.2 percent of GDP, and by 2019 the debt will be equal to 76 percent of the value of the nation's output of goods and services, almost double the 41 percent when Obama took control of the nation's finances. No problem, say White House economists. Unsustainable, says Warren Buffett, among others.

Which brings us to Martha's Vineyard and Beijing. A tie-less President took time off his vacation on Martha's Vineyard to praise and reappoint an also tie-less Ben Bernanke to another four-year term as chairman of the Federal Reserve Board. The lack of neckwear could not conceal a certain tension. The president was trying to divert attention from the very bad news about his burgeoning budget deficits, and the chairman was trying to reassure the markets that notwithstanding his reputation as "Helicopter Ben", the man who would fight recessions by dropping cash from the skies, he would indeed rein in all that extra liquidity when the right time comes. Given that his new term runs until the end of January, 2014, Bernanke can with impunity tighten just as Obama launches his 2011 campaign for a second term. Recall that it was just such a tightening and consequent slowing of the economy by Alan Greenspan that George Bush the elder still feels handed the 1992 election to Bill Clinton. For good central bankers, gratitude at reappointment does not trump sound policy.