CBO report: Debt will rise to 90% of GDP

• tk421

  

  http://www.washingtontimes.com/news/2010/mar/26/cbos-2020-vision-debt-will-rise-to-90-of-gdp/
  
  The liberals on here won't like this because it comes from their beloved CBO, whom if everyone will remember, says that the Obama health plan passed will reduce the deficit. Ha. Where exactly is the reduction in the deficit? Now that the plan has already been passed and signed into law, all of a sudden the Obama administration will have us seeing 20 Trillion deficit in 10 years? What changed?
  
  http://www.reuters.com/article/idUSTRE61O4NV20100318
  
  Hmm, how do the liberals on this site explain the extreme contrast between these two reports from the same government agency? Either the CBO is accurate, like for the health care, or it is completely bunk? Which one is it?
  

  House Democratic leaders unveiled the final changes to the overhaul, which the nonpartisan Congressional Budget Office estimated would expand coverage at a cost of $940 billion over 10 years and cut the deficit by $138 billion in the same period through new fees, taxes and cost-saving measures.

  How do you cut the deficit in the same period that the deficit will increase to 20 Trillion? Anyone?
• cbus4life

  Which one do you think is true? Which one is it going to be for you? I mean, if you're going to believe this last CBO report, aren't you acting the same way as the liberals might be in believing one over the other?
  
  As for me, i don't really buy either.
• Shane Falco

  I'll take the over for 1000 Alex!
• Writerbuckeye

  

  Shane Falco wrote: I'll take the over for 1000 Alex!

  Here's your answer.
  
  The CBO is historically wrong -- and historically LOW.
  
  That's not good news for any of us.
• majorspark

  

  cbus4life wrote: Which one do you think is true? Which one is it going to be for you? I mean, if you're going to believe this last CBO report, aren't you acting the same way as the liberals might be in believing one over the other?
  
  As for me, i don't really buy either.

  The CBO is notoriously known for underestimating the impact of government spending. I don't believe their numbers for a minute. It will be worse. We are screwed.
• tk421

  

  cbus4life wrote: Which one do you think is true? Which one is it going to be for you? I mean, if you're going to believe this last CBO report, aren't you acting the same way as the liberals might be in believing one over the other?
  
  As for me, i don't really buy either.

  I don't agree with any of the reports. I agree with the others, it will be a lot worse. We had some liberals on here last week though who were using the report that the health care bill will lower the deficit as a major reason to pass it. The party of "no" was standing in the way of a lower deficit, not to mention health "care" for everyone. Where are those same people now, is what I'm wondering?
• believer

  

  tk421 wrote:Where are those same people now, is what I'm wondering?

  Running for cover.
  
  November can't get here soon enough.
• Cleveland Buck

  

  The debt is around 90% of GDP right now. We are approaching the breaking point. Anyone who believes anything the CBO says about a spending bill is a naive idiot.
• believer

  

  ^^^Or a Big Government is good Kool Aid drinker. Oh that's right...that's the same thing as a naive idiot.
• Footwedge

  Ha!!... Conservaties blaming liberals for a runaway national debt. Want to really stop unnecessary spending? Vote in a bunch of libertarians.
• Writerbuckeye

  

  You bet your ass we're blaming them.
  
  The TIPPING POINT IS HAPPENING NOW.
  
  And THEY are in power NOW and can prevent this.
  
  So, instead of doing the right thing, they are forcing a government expansion and takeover the likes of which our country has never seen -- pushing that brink ever closer.
  
  Dems can stand and point fingers and say: nah nah nah, you got us here, too -- but the FACT remains that the critical point of no return is happening on THEIR watch, and with an historic advantage in Congress.
  
  If worse comes to worst -- they will forever be known as the party that bankrupted America, because they were in power AND HAD A CHOICE before it all turned to shit.
• ptown_trojans_1

  

  2 things.
  1. It is the Washington Times and other than Bill Gertz, they have zero credibility in my view.
  
  2. They didn't link to the CBO report. Who doesn't hyperlink or at least adds a link to which CBO report said this? Even the Washington Post links to reports they are reporting.
  
  So, I'd like to know the CBO report where this is stated, or if it was testimony. I tried to look on the CBO website, but for some reason, couldn't.
  Not doubting the numbers, I would just like to read the report myself and form my own view. I'm a sucker for government reports, usually they tell way more than any news story and reporters usually get the context wrong.
• I Wear Pants

  Have you considered that when they said the health care bill will cut the deficit that they meant that it will cut the deficit in relation to what the (prior to the bill being passed) status quo of health care would have?
• QuakerOats

  I'll take the Washington Times any day over the other local rag.
  
  excerpt - "The federal public debt, which was $6.3 trillion ($56,000 per household) when Mr. Obama entered office amid an economic crisis, totals $8.2 trillion ($72,000 per household) today, and it's headed toward $20.3 trillion (more than $170,000 per household) in 2020, according to CBO's deficit estimates.'
  
  Thanks barry!!
  
  CBO: Debt Will Rise to 90% of GDP
  Friday, 26 Mar 2010 08:02 AM
  http://www.washingtontimes.com/news/2010/mar/26/cbos-2020-vision-debt-will-rise-to-90-of-gdp/
  
  By: David M. Dickson
  
  President Obama's fiscal 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than the administration projected, and raise the federal debt to 90 percent of the nation's economic output by 2020, the Congressional Budget Office reported Thursday.
  
  In its 2011 budget, which the White House Office of Management and Budget (OMB) released Feb. 1, the administration projected a 10-year deficit total of $8.53 trillion. After looking it over, CBO said in its final analysis, released Thursday, that the president's budget would generate a combined $9.75 trillion in deficits over the next decade.
  
  "An additional $1.2 trillion in debt dumped on [GDP] to our children makes a huge difference," said Brian Riedl, a budget analyst at the conservative Heritage Foundation. "That represents an additional debt of $10,000 per household above and beyond the federal debt they are already carrying."
  
  The federal public debt, which was $6.3 trillion ($56,000 per household) when Mr. Obama entered office amid an economic crisis, totals $8.2 trillion ($72,000 per household) today, and it's headed toward $20.3 trillion (more than $170,000 per household) in 2020, according to CBO's deficit estimates.
  
  That figure would equal 90 percent of the estimated gross domestic product in 2020, up from 40 percent at the end of fiscal 2008. By comparison, America's debt-to-GDP ratio peaked at 109 percent at the end of World War II, while the ratio for economically troubled Greece hit 115 percent last year.
  
  "That level of debt is extremely problematic, particularly given the upward debt path beyond the 10-year budget window," said Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget.
  
  For countries with debt-to-GDP ratios "above 90 percent, median growth rates fall by 1 percent, and average growth falls considerably more," according to a recent research paper by economists Kenneth S. Rogoff of Harvard and Carmen M. Reinhart of the University of Maryland.
  
  CBO projected the 2011 deficit will be $1.34 trillion, not much different from the administration's estimate of $1.27 trillion. However, CBO's estimate of the 2020 deficit at $1.25 trillion significantly exceeds the administration's $1 trillion estimate.
  
  "The biggest part of the deficit difference is lower tax revenue due to the different economic assumptions," said James R. Horney, a federal-budget analyst at the liberal Center on Budget and Policy Priorities. "The administration assumes GDP and incomes will be higher, and that translates into higher revenues than CBO expects. Relatively small differences in economic assumptions can add up to big differences over 10 years."
  
  While Ms. MacGuineas agreed that "economic forecasts have a large impact on budgetary projections," she cautioned that such differing assumptions, often called the "rosy scenario," could account for just $350 billion of the 10-year, $1.2 trillion difference between the White House and CBO.
  
  The president has established a fiscal commission to propose actions to reach his goal of balancing the budget by 2015, except for net interest payments, which CBO projects to total $520 billion that year. The president's budget, however, will generate a $793 billion deficit in 2015, according to CBO.
  
  "The proposed budget is woefully insufficient to achieve the president's goal or the important fiscal goal of stabilizing the debt at a reasonable level in the medium and long term," Ms. MacGuineas said.
  
  The CBO and the administration expect the deficit for fiscal 2010, which ends Sept. 30, to approximate $1.5 trillion and exceed 10 percent of GDP, the first time that threshold will have been reached since World War II. Before last year's deficit reached an eye-popping 9.9 percent of GDP, the biggest postwar deficit was 6 percent of GDP in fiscal 1983.
  
  In addition to the free-spending fiscal policy the U.S. government will pursue, monetary policy will remain loose in the near term, Federal Reserve Chairman Ben S. Bernanke told a congressional committee Thursday.
  
  Citing still-fragile economic conditions and noting the low level of inflation, Mr. Bernanke told the House Financial Services Committee that the Fed would maintain historically low short-term interest rates for the time being.
  
  Tightening would not begin until the "expansion matures," he said, though he did not provide a specific timetable for ratcheting up interest rates.
  
  Indicative of the economy's ongoing fragility, especially in the labor market, was the fact that first-time claims for unemployment benefits were still a relatively high 442,000 last week, the Labor Department reported Thursday. The number was a decline of 14,000 over the previous week's seasonally adjusted number.
  
  Economists disagree over the propriety of running a $1.5 trillion deficit this year as the economy shifts into recovery mode. But they generally agree that budget deficits should proceed along a consistent, downward path as the expansion matures. Most economists, therefore, fear the prospect of rising deficits in the latter part of this decade, long after steady economic growth has returned and unemployment has plunged.
  
  In a worrisome development, CBO projects that federal budget deficits, after dropping sharply, then will begin to rise continuously from 4.1 percent of GDP in 2014 to 5.6 percent in 2020.
  
  For the 2016-20 period, CBO estimates that deficits will average more than 5 percent of GDP, even while assuming the economy will be near full employment, with an average jobless rate of 5 percent during that same five-year period.
  
  One economist concerned about unsustainable fiscal policy in the out years is OMB Director Peter R. Orszag.
  
  "Deficits in the, let's say, 5 percent of GDP range would lead to rising debt-to-GDP ratios in a manner that would ultimately not be sustainable," Mr. Orszag acknowledged to reporters on March 20, 2009, two months after the administration entered office.
• ptown_trojans_1

  

  I'd still like the actual CBO report to really get the full context and to examine the numbers.
  
  As someone who had a subscription to both the Washington Post and the Times, I'd easily take the Post.
• tk421

  

  I Wear Pants wrote: Have you considered that when they said the health care bill will cut the deficit that they meant that it will cut the deficit in relation to what the (prior to the bill being passed) status quo of health care would have?

  So, that would mean it didn't "cut" the deficit at all. Pure political BS.
• tk421

  

  ptown_trojans_1 wrote: I'd still like the actual CBO report to really get the full context and to examine the numbers.
  
  As someone who had a subscription to both the Washington Post and the Times, I'd easily take the Post.

  For some reason, the CBO website seems to be down. Hmm?
• ptown_trojans_1

  

  tk421 wrote:

  ptown_trojans_1 wrote: I'd still like the actual CBO report to really get the full context and to examine the numbers.
  
  As someone who had a subscription to both the Washington Post and the Times, I'd easily take the Post.

  For some reason, the CBO website seems to be down. Hmm?

  Yeah, I noticed that too, or I just would found the report.
  It is odd.
• tk421

  

  Here is this report, but I don't know if it is the one the Times used because it is dated January 2010. The article said the CBO reported Thursday the 25th, but I can't find a report for March.
  
  http://www.cbo.gov/ftpdocs/108xx/doc10871/frontmatter.shtml
• I Wear Pants

  tk421 wrote:

  I Wear Pants wrote: Have you considered that when they said the health care bill will cut the deficit that they meant that it will cut the deficit in relation to what the (prior to the bill being passed) status quo of health care would have?

  So, that would mean it didn't "cut" the deficit at all. Pure political BS.

  This is hypothetical:
  Deficit added by old health care: $1000
  Deficit added by new health care bill: $800
  
  While it may not have cut into the overall deficit it definitely helped reduce what was added. It's a matter of wording and I could very likely be wrong but I had always assumed that they meant cut the deficit in relation to what it would have been without any reform.
• tk421

  

  I Wear Pants wrote:

  tk421 wrote:

  I Wear Pants wrote: Have you considered that when they said the health care bill will cut the deficit that they meant that it will cut the deficit in relation to what the (prior to the bill being passed) status quo of health care would have?

  So, that would mean it didn't "cut" the deficit at all. Pure political BS.

  This is hypothetical:
  Deficit added by old health care: $1000
  Deficit added by new health care bill: $800
  
  While it may not have cut into the overall deficit it definitely helped reduce what was added. It's a matter of wording and I could very likely be wrong but I had always assumed that they meant cut the deficit in relation to what it would have been without any reform.

  It's pure semantics. If I spend 5,000 more than I have and the next year only spend 3,000 dollars more than I have, did I save money? It's all political double speak that the public laps up because they are too stupid to realize otherwise.
• I Wear Pants

  I get that. I nearly said "it's just semantics" in my post.
  
  The thing is in the $3000 scenario you're at least taking steps towards not adding debt.
  
  But yes, I get how it is deceiving to label it as reducing the deficit. They should have just said "adds less to the deficit". Because then we could argue numbers and not semantics.
• majorspark

  

  I Wear Pants wrote: I get that. I nearly said "it's just semantics" in my post.
  
  The thing is in the $3000 scenario you're at least taking steps towards not adding debt.
  
  But yes, I get how it is deceiving to label it as reducing the deficit. They should have just said "adds less to the deficit". Because then we could argue numbers and not semantics.

  They can say what they want. The CBO has no credibility. It will not add less to the deficit. History is quite clear. It will add more. There is really no way to predict federal budgets, congress can add always add spending bills.
• Footwedge

  Writerbuckeye wrote: You bet your ass we're blaming them.
  
  The TIPPING POINT IS HAPPENING NOW.

  Ross Perot said that the tipping point was happening in 1992.
  

  And THEY are in power NOW and can prevent this.

  As opposed to the other Congresses over the past 30 years that "could have prevented this".
  

  So, instead of doing the right thing, they are forcing a government expansion and takeover the likes of which our country has never seen -- pushing that brink ever closer./

  Looks to me that Reagan tripled the ND, GWB doubled it, and now projections are that Obama will double it again. Sounds about right to me. R/D....doesn't matter, and will never matter.
  

  Dems can stand and point fingers and say: nah nah nah, you got us here, too -- but the FACT remains that the critical point of no return is happening on THEIR watch, and with an historic advantage in Congress.

  Again..the critical point of no return happened decades ago. Remember 1992?
  

  If worse comes to worst -- they will forever be known as the party that bankrupted America, because they were in power AND HAD A CHOICE before it all turned to shit.

  There have been choices avaailable for the past 40 years or so. All Congresses in my lifetime have added to the national debt, with the only exception being the 99-2000 Congress. And we all know that the 2 year reduction had very little to do with spending cuts.
  
  Writer, buy yourself a kegonator, enjoy your brewskies, and sit back and revel in the collapse of the American economy.
  
  You and I tried to stop it for decades...nobody listened to us then...why should you and I expect them to listen to us now?
  
  Here's a little prediction....if the GOP takes over the Congress this year....well guess what? The national debt will still double over the next 8 years.
  
  Nobody has the nads to stop printing money to feed the masses or expand the empire across the seas. Only the election of libertarians across the board would have any impact at all.
  
  And the libertarian people are viewed as neandrathols.
  .
• tk421

  

  There have been choices avaailable for the past 40 years or so. All Congresses in my lifetime have added to the national debt, with the only exception being the 99-2000 Congress. And we all know that the 2 year reduction had very little to do with spending cuts.
  
  Writer, buy yourself a kegonator, enjoy your brewskies, and sit back and revel in the collapse of the American economy.
  
  You and I tried to stop it for decades...nobody listened to us then...why should you and I expect them to listen to us now?
  
  Here's a little prediction....if the GOP takes over the Congress this year....well guess what? The national debt will still double over the next 8 years.
  
  Nobody has the nads to stop printing money to feed the masses or expand the empire across the seas. Only the election of libertarians across the board would have any impact at all.
  
  And the libertarian people are viewed as neandrathols.

  When the dollar collapses, maybe the public will take the libertarians a little more seriously. Oops, that will be too late. This country is screwed.