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.
October 11, 2013
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."
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