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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Alex MG who wrote (239746)

12/11/2013 3:51:10 PM

From: Alex MG

Read Replies (1) | Respond to of 541791

Can Someone Teach Steve Rattner How CBO Does Its Projections?

Wednesday, 11 December 2013 05:20

cepr.net

Steve Rattner is upset that Congress isn't voting to cut Social Security and Medicare, complaining about this fact in a NYT column this morning. Much of the problem seems to stem from Rattner's misunderstanding of budget projections and his failure to pay attention to recent developments in health care spending.

At one point Rattner gives us the distressing news that a do nothing scenario will give us a debt to GDP ratio by 2035 of 99 percent (@ 19 percentage points less than the post World War II peak) then tells us:

"That may be too rosy a picture. The Congressional Budget Office assumes robust growth over the coming decade — not a single year of recession and three annual G.D.P. increases of about 4 percent beginning in 2015. (By comparison, the G.D.P. is likely to grow by just 1.7 percent this year.) Slower growth means a higher debt-to-G.D.P. ratio."

Actually CBO constructs long-term projections that are supposed to average out the impact of recessions and the more rapid growth that usually follows them. This explains the three years of 4 percent GDP growth. The economy is currently 6 percentage points below its potential according to CBO's estimates. These three years of rapid growth would allow it to make up this gap. The average growth rate projected for the next 22 years is 2.36 percent, which hardly seems especially fast given the economy's current position.

The other part of the story is that Rattner apparently missed is the sharp slowdown in the growth of health care spending we've seen over the past five years. This has already led CBO to substantially lower its projection for health care spending in future decades. If CBO were to fully incorporate the recent slowdown in health care spending in its projections, then the primary (non-interest) budget would be nearly balanced for decades into the future.

To: Alex MG who wrote (239746)	12/11/2013 4:06:47 PM
From: koan	Read Replies (2) \| Respond to of 541791

When I hear "grand bargin" I want to run down the middle of the street waving my arms and yelling no, no, no. Now for Obama's acid test!!!: Will he offer up entitlement cuts for a grand bargin? We liberals will stand for no more cuts to the safety net. We are ready to go to the mattresses like we did in the 60's. No chained CPI!

To: Alex MG who wrote (239746)	12/11/2013 4:11:02 PM
From: koan	Read Replies (1) \| Respond to of 541791

Did Harold Ford's dad accept him when he was young? I seem to remember it as a secret?? But I can't remember for sure? Look how much he had to conform in his life. "Ford is the son of former Congressman Harold Ford, Sr. and Dorothy Bowles Ford. [2] His family has long been prominent in Memphis' African American community; their influence dates back to the late 19th century, when E.H. Crump, a prominent white Democrat, dominated city and state politics and befriended Harold Ford Sr.'s grandfather, N.J. Ford. [3] Ford was baptised at his church, Mt. Moriah-East Baptist Church in Memphis, Tennessee. He attended Double Tree Elementary School, a public Montessori school in the Westwood neighborhood of South Memphis, and he graduated from the private St. Albans School for Boys, a prestigious university-preparatory school in Washington, D.C. He received a B.A. in American history from the University of Pennsylvania in 1992. [4] After graduation, he was a staff aide to the Senate Budget Committee, and in 1993 became special assistant at the United States Department of Commerce. [5] Ford received a J.D. from the University of Michigan Law School in 1996. During his campaign for the House of Representatives, he sat for and failed the Tennessee bar exam; he has said that he intends to try again. [6] Ford is married to Emily Threlkeld, who works in public relations for Carolina Herrera in New York. They married on April 26, 2008. [7]