Wall Street hit a major slump during trading Thursday. The S&P 500 (1.69 percent, 18.53 points) and NASDAQ (1.66 percent. 36.75 points) led the market free fall, but the Dow Jones (1.39 percent, 144.53) suffered the most overall.

According to MarketWatch, stock futures dropped during after hours trading as investors dealt with personal jitters in the face of another day with no major economic reports.

Analysts with CNNMoney.com projected a drop during the morning. Markets dropped fairly significantly in the first hour and seem poised for another net negative day. Data on unemployment seems to be the major weak point for financial investment.

In other news, according to Reuters, the alarming deficit forecast for 2010 may be hiding the real problems faced by our fiscal disaster. The U.S. is projected to add roughly $1.3 trillion to its national debt by the end of the year. It is also projected to add nearly $6.2 trillion over the next ten years.

However, these projections are all based on assumptions that could change from day to day. The Congressional Budget Office is assuming that certain tax breaks will be allowed to expire over time – the government seems increasingly likely to extend more tax breaks than it absolutely must. The CBO also does not factor in the very real possibility that the U.S. will still be involved in Iraq or Afghanistan a decade from now.

If the Bush tax cuts for the top two tax brackets are extended the budget shortfall could jump quickly from $6 trillion to $11 trillion. If other tax cuts or rebates are enacted over the next few years that number will grow even further. The U.S. has spent the last decade proving that cutting taxes does not encourage economic development. Now is probably the time to try a different solution to our economic malaise.

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