Five Things to Know About CBO Projections and Estimates

Regardless where you stand on the immigration bill, the following information as to how the CBO operates is healthy to have in mind any time the CBO releases a projection: 1) The CBO is a calculator. They simply add up the numbers that Congress gives them. The CBO does not vouch for the figures they were given; they simply do the math. So if Congress tells them that a new bill will add an X amount of workers over the next decade, the CBO consolidates other projections of the decade -- such as their expected GDP/Economic growth -- and they produce a bottom line. Hence, the CBO said the immigration bill will save the U.S. $197 billion over the next decade. 2) The CBO is always shortsighted on economic growth. For example, in their 2000-2010 budget projection they didn't foresee the 9/11 attacks; the war on terror and the revelation of corporate corruption. As a result, they predicted trillions of surpluses over the next decade which never materialized. Worse, in early 2008, the CBO...(Read Full Post)

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