December 16, 2011 | 8 comments
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December 14, 2011 | 39 comments
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Peter Orszag is becoming increasingly honest now that he’s no longer the head of the Office of Management and Budget. Here he is on rosy scenarios:
The CBO assumes economic growth will exceed 3 percent per year from 2012 to 2016 before gradually declining to a bit more than 2 percent in 2021. What if, instead, growth remains at 2 percent to 2.5 percent for the next decade? I asked Kogan to recalculate the budget numbers assuming a constant growth rate of 2.25 percent per year, which seems a plausible hard-slog scenario.
He found that the deficit then averages more than 7 percent of GDP. By 2021, it is more than 8.5 percent of GDP and increasing.
Under these modified growth assumptions, the cumulative deficit for the next decade is $13.7 trillion. In other words, the impact from sluggish growth on the budget shortfall over the same period exceeds $2.5 trillion — which is more than the roughly $2 trillion in deficit reduction that may wind up being agreed to as part of a deal to lift the debt ceiling.
Orszag seems to think that the less favorable outlook is the more likely one.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
Was the President done in by the economy, or by the politics of the economy?
H/T to National Review Online