October 11, 2013
Truth in the Age of Niallism

Here are three facts about how the 10-year budget outlook has changed in the past year: 1) the fiscal cliff deal raised $600 billion in new revenue; 2) the sequester, if left in place, cut $1.2 trillion; 3) the CBO revised its projection for federal healthcare spending down by $600 billion.
Harvard historian Niall Ferguson has a counterfactual take. Here’s how he described how our debt trajectory changed the past year:
“A very striking feature of the latest CBO report is how much worse it is than last year’s. A year ago, the CBO’s extended baseline series for the federal debt in public hands projected a figure of 52% of GDP by 2038. That figure has very nearly doubled to 100%. A year ago the debt was supposed to glide down to zero by the 2070s. This year’s long-run projection for 2076 is above 200%. In this devastating reassessment, a crucial role is played here by the more realistic growth assumptions used this year.”
This isn’t a difference of opinion. It’s incorrect. But it’s incorrect for reasons that will escape casual readers. 
Read more.

Truth in the Age of Niallism

Here are three facts about how the 10-year budget outlook has changed in the past year: 1) the fiscal cliff deal raised $600 billion in new revenue; 2) the sequester, if left in place, cut $1.2 trillion; 3) the CBO revised its projection for federal healthcare spending down by $600 billion.

Harvard historian Niall Ferguson has a counterfactual take. Here’s how he described how our debt trajectory changed the past year:

A very striking feature of the latest CBO report is how much worse it is than last year’s. A year ago, the CBO’s extended baseline series for the federal debt in public hands projected a figure of 52% of GDP by 2038. That figure has very nearly doubled to 100%. A year ago the debt was supposed to glide down to zero by the 2070s. This year’s long-run projection for 2076 is above 200%. In this devastating reassessment, a crucial role is played here by the more realistic growth assumptions used this year.”

This isn’t a difference of opinion. It’s incorrect. But it’s incorrect for reasons that will escape casual readers.

Read more.

December 10, 2012
"What if I told you we could raise taxes, cut entitlement spending, and break the cliff stalemate for good, by changing one obscure policy? Ladies and gentlemen: Meet chained CPI."

Derek Thompson, on the sneaky, complicated idea that could end the fiscal cliff showdown.

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