Can’t Handle The Migraine From Reading The 165 Page CBO Report? Then Read This Nutshell Version.

This These New Times piece is simply excellent:

CBO Report: OMG!

The Congressional Budget Office (CBO) is out with its annual report. It’s a blockbuster. This 165 page monster is filled with dozens of charts, graphs and detailed projections. It will be talked about for weeks. The report provides a dismal outlook for the economy. There is one data point I’d like to focus on.

Here is the CBO forecast for real GDP for 2012 and 2013:

The 1.1% Real GDP number for 2013 surprised me. The CBO’s expectations are way under those of both the “Blue Chip” economists and the Federal Reserve:

What does it mean if the economy is going to slow, as CBO now thinks? Some consequences:

The CBO now forecasts Social Security to run into trouble in just a few years. This is a very substantial change in the outlook for SS. Changed fortunes make it a certain that America’s favorite entitlement program will be on the table for a significant re-vamp.

The CBO has answered two critical question:

1) In what year does SS first goes into deficit (including interest)?

2) What is the size of the SS Trust Fund when #1 has been achieved?

Key data is here:

Using this information, we can estimate the Trust Funds (TF) balances over time, and compare them to what SS forecast in its report to Congress ten-months ago:

 
SSTF’s “Intermediate” (Base) case:
 

The bottom line is that the SSTF is going to top out three years ahead of “schedule” and be $800B shy of what it was “supposed” to be.

I think the CBO report has created a big headache for a good number of folks in D.C. Most of them are running for office this year. They certainly won’t be able to wave the CBO report as a measure of how well they are doing.

 

You can get an even more concise synopsis from my article here.

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2 Responses to “Can’t Handle The Migraine From Reading The 165 Page CBO Report? Then Read This Nutshell Version.”

  1. Brandy Clinton Says:

    Great Post! This site is one of the websites I visited today that is worth bookmarking and adding to favorites. I cant wait to read more interesting facts and ideas on this site.

  2. Michael Eden Says:

    Thanks much, Brandy.

    Though in fairness I have to state that this particular article was mostly a repost of someone ELSE’S great article…

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