CBO Report: Future deficits to be worse than originally thought
Peter Suderman at Hit and Run lifts an overlooked number from the CBO repoirt earlier this week that had everyone in a tizzy over the Obamacare numbers.
The CBO estimates that the deficit will rise by $7.3 trillion over the next decade - a trillion more than the CBO's last estimate.
That's not great news. But it's actually worse than it sounds. As the budget analysts at the Committee for a Responsible Federal Budget explain, this actually understates the size of the increase.
That's because last year's deficit totals were artificially inflated because of a scoring convention that required the budget office to count $425 billion worth of one-time spending on Hurricane Sandy as a recurring annual expense. That assumption is gone this year, but it means that last year's 10-year deficit total was actually more like $5.9 trillion.
The projections worsen further if you update the time frame. Last year's projections looked at the 2014-2023 budget window. This week's report stretches from 2015-2024. Since annual deficits are now expected to grow at a greater clip, that makes for a bigger change. Here's the CRFB's graph showing the actual size of the change:
The main reason for the update is that the CBO now foresees slower economic growth over the next decade than it used to. "By 2017," the budget office report said, "CBO expects that economic growth will diminish to a pace that is well below the average seen over the past several decades." And the accumulating debt won't exactly help. The "large and growing federal debt" the CBO expects the nation to shoulder could have "serious negative consequences, including restraining economic growth in the long term."
Meanwhile, Kevin Drum of Mother Jones, decries what he calls the "Madness of Austerity." Why? Because there were 5% fewer government workers per capita since 2010. And as we all know, prosperity can only be found when government at all levels is adding layer after layer to the bureaucracy by hiring more workers.
Yes, there are fewer federal government workers today than a decade ago. Many would argue there were too many federal workers to begin with. But the notion that our economy depends on how many people are working for the government at any level is absurd. If you want to talk about the loss of federal and state government jobs resulting in a degradation in the delivery of services, fine. I don't see it and most would agree with me. But please don't try to convince us that the economy rises or falls based on how many bureaucrats are pushing paper.
What is more insane? Running deficits that will eventually banrkupt us or firing a few government workers?