Free Markets, Free People

Former CBO Director Now Finds CBO Numbers Not So Good

This parallel world that exists only within the DC beltway and where the laws of economics don’t apply has got to be merged again with the real world we all live in as soon as possible:

Despite new estimates that say President Barack Obama’s budget would generate unsustainable large deficits averaging almost $1 trillion a year, the White House insisted Friday that the flood of red ink won’t swamp its costly agenda.

The Congressional Budget Office figures released Friday predict Obama’s budget will produce $9.3 trillion worth of red ink over 2010-2019. That’s $2.3 trillion worse than the administration predicted in its budget just last month.

Worst of all, CBO says the deficit under Obama’s policies would never go below 4 percent of the size of the economy, figures that economists agree are unsustainable. By the end of the decade, the deficit would exceed 5 percent of gross domestic product, a dangerously high level.

Just feast your eyes on those statements. First – 10 years of trillion dollar deficits “won’t swamp” the “costly agenda” of the Obama administration? Really? Or is it just that the administration refuses to acknowledge the reality of the coming deficits and intends to imperil the economy to push its social agenda forward? Which is more likely true?

And how does the administration address the CBO projections?

White House budget chief Peter Orszag said that CBO’s economic projections are more pessimistic than those of the White House, private economists and the Federal Reserve and that he remained confident that Obama’s budget, if enacted, would produce smaller deficits.

About those deficits?

About those deficits?

Orszag, the former director of the CBO, now finds the CBO just isn’t an entity in which we should put much stock when it comes to budget analysis – especially when it finds such budget numbers “unsustainable”. Nope. Instead we should heed the Fed – which has proven to be such an economic font of solutions in this current crisis – and unnamed “private economists” whose only claim to fame is they agree with the administration’s projections. The organization Orszag previously led suddenly has a credibility problem.

However Orszag did have to admit that if the CBO is right, well, that’s a horse of a different color:

Even so, Orszag acknowledged that if the CBO projections prove accurate, Obama’s budget would produce deficits that could not be sustained. “Deficits in the, let’s say, 5 percent of GDP range would lead to rising debt-to-GDP ratios that would ultimately not be sustainable,” Orszag told reporters.

Of course there have been many economic analysts prior to the CBO projections who have found the administration’s projections to be very optimistic in outlying years, in fact the term “rose colored glasses” seems most apropos.

So which makes more sense to you in this particular time of financial crisis- listen to those who say your projections are too rosy and trim them back (and the deficits they produce) to ensure that should it happen as the more pessimistic projections hold, you don’t chance pushing the nation into a period of unsustainable debt, or waive them off and take the chance that you’re right and they’re not?

“Caution” seems like a very important watch-word at this point, or it should be.

Instead we’re seeing a “damn the icebergs, full speed ahead” attitude from the crew of the economic Titanic.

~McQ

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11 Responses to Former CBO Director Now Finds CBO Numbers Not So Good

  • I think the news is even worse for this current year.  I heard on the news that the CBO predicted an almost $2 Trillion budget shortfall just for this year.  And that was up from the last estimate, and almost $1 Trillion more than what the Obama administration predicted.

    • Well, don’t forget, the President has promised to cut that deficit in half by the end of his first (and hopefully only) term. That means he’ll have it down to a trillion dollars a year, just like the CBO is projection. Heh…

  • Oh. My. God.

    I’m starting to feel nauseous.

    There are only three things that might save us:

    1.  Congress gets its collective head out of its ass and realizes that they can’t allow budgets like this;

    2.  Washington gets hit by a rouge meteor

    Yeah, right.

  • More of the same Hubris – his name should be Barack Hubris Obama. 

    From the “O” of his planned PWA logo, to his appearance on Leno, it’s becoming damn obvious he makes Clinton’s ego look like that of a wall flower. 

    He’s not just campaigning, he LIKES being on camera, he likes being there.  Now I know that’s more or less why they run for the job, because to some extent they do like the attention, but enough is enough. 
    And I’m becoming convinced he’s not just ‘caught up in his own celebrity’.

  • White House budget chief Peter Orszag said that CBO’s economic projections are more pessimistic than those of the White House, private economists and the Federal Reserve and that he remained confident that Obama’s budget, if enacted, would produce smaller deficits.

    Is this orszag speaking in his WHite House role, or in his JournoList role?

  • Once again, you dense rightie, ex-military basket cases at QandO start discussing complex economic things you don’t understand. Obama told us that he was going to cut spending, and as I’ve assured you, he will. It’s a calculated gamble that’s guaranteed to work. You just have to accept that. I decree it.

    But I’m open to discussion and debate on this, as long as you mean righties don’t start calling me names, or bring up your pre-post-modern “facts” that supposedly refute what I say. Come on over to my blog, which I am absolutely not pimping for, to find out more. I have a great post today on how stupid righties are and why Obama is better than Christ. (Hint: it involves the fact that he’s thinks the same way I do.)