Follow Paul Gregory by Email

Friday, February 3, 2012

Those CBO Growth and Budget Projections: Just Forget About Them

The CBO 2012 and 2013 projections grabbed a lot of attention when they were released earlier in the week. The headlines were that growth will slow to two percent in 2012 and one percent in 2013, unemployment will rise to over nine percent by 2013, but the deficit will shrink dramatically. All of these calculations are based, as I pointed out in a recent blog, on discredited Keynesian models anyway.

None of these things will happen because the policy assumptions on which these projections are based will never materialize. The Bush tax cuts will not be dropped in their entirety (a slight possibility if Obama is reelected). Discretionary spending will not decline in absolute value over a five year period, and the various cuts in Medicare will not take place.

Actually the CBO points all this out, but commentators look only at the headlines and ignore the crucial details that tell us: “Never mind.”

1 comment:

  1. You may not believe it but one of the foremost common issues facing

    folks throughout their everyday lives may be a concern of being short. However if

    you're one of those individuals who currently desires there was one thing

    you'll be able to do to increase your height naturally,simply follow the website

    that offers the great concepts to be taller.
    Delbert Berquist