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Congressional Budget Office Makes More Stuff Up For It's Latest Report

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Today, the CBO whipped out its trusty old magic 8 ball, and released its revised forecast of the future. Since there is a substantial difference from the March forecast for the cumulative 10 year deficit over the 2012-2021 period, to the tune of $3.250 trillion, or just about 50% of the last deficit forecast of $6,737 billion, which is now a ridiculous $3.5 trillion...by pointing out according to the same CBO back in 2001, net US indebtedness in 2011 would be negative $2.436 trillion, the ratio of debt held by the public to GDP would be 4.8%, total budget surplus would be $889 billion, and GDP would be $16.9 trillion.


Real GDP growth in 2011: 2.3%, in 2012: 2.7%, then 3.6% in 2013-2016, and 2.4% in 2017-2021

Unemployment rate of 8.9% in 2011; 8.5% in 2012; then a plunge to 5.3% in 2016 and 5.2% in 2021. This is surely feasible... if the labor force drops to 30% of the population.

Interest rates on the 10 Year at 3.2% in 2012, then rising to 5.3% in 2021.


Much of the increase through 2014 is attributable to the expiration of tax provisions enacted since 2001 and, to a lesser extent, to other scheduled changes in tax rules.


In addition, certain structural features of the individual income tax will cause receipts to rise gradually over the next 10 years, and factors related to the economic recovery (such as anticipated rebounds in wages and salaries and in realizations of capital gains that are expected to outstrip projected growth in GDP) are projected to increase revenues further relative to GDP. Together, all of those forces push federal revenues in CBO’s baseline to 20.9 percent of GDP by 2021 (excluding any changes arising from provisions of the Budget Control Act related to the deficit reduction committee). Over the past 40 years, federal revenues have averaged 18.0 percent of GDP.

Excellent so wages which for the majority of Americans have stagnated over the past decade are now magically going to recover. Taleb I'm sure will love the last comment that the past is a great indicator of the future.

Still I'm sure it will all work out...

Edited by interestrateripoff

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  • 338 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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