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Politics : Sioux Nation -- Ignore unavailable to you. Want to Upgrade?

To: SiouxPal who wrote (16359)	5/10/2005 10:33:49 AM
From: DavesM	Respond to of 361371

Dueling banjoes is right. I was basing my post off of the CBO's 2004 report. CR was using the CBO's 2005 projections. I was curious naturally, as to how the CBO could change its numbers so much in one year. Here's how: The 2004 Report projects economic GDP growth during the current decade to average 2.9% per year (or less than rate of growth during the 80's (3.0%) or 90's(3.1%)). The 2005 Report projects economic growth in the current decade to surpass the economic growth of either the 80's(1980-1989) or 90's(1990-1999) - an average of 3.2% per year. The 2004 Report basically projects the unemployment rate to be steady at 5.5% for the next 50+ years. While the 2005 Report projects unemployment to be steady at 5.2% for the next 90 years (roughly half a million more people paying Social Security each year). Finally, I believe that the 2004 projections assume that the real rate of return on Social Security's bond portfolio will be 3.0%. The 2005 projections assume that the real rate of return the SS's bonds will be 3.3% over the rate of inflation (from what I could tell, the last auction of 30 year TIPs paid 3-3/8%). As one could imagine, very small changes in economic growth on a economy that is already huge, a GDP of >$11Trillion and a workforce of over 150million, can have a rather large impact when projections are taken out 30-40 years.