Tuesday, February 05, 2013

CBO predicts sub-trillion dollar deficit; eyerolls follow

I heard this on the radio driving home today that the Congressional Budget Office is predicting a $845 billion deficit in 2013 to which I replied (to nobody) "Yeah, right."  Zero Hedge was in the same mind: "CBO releases latest budget forecast: hilarity ensues"
We will also note that the now-forecast 2013 budget deficit of $845 billion was supposed to be a deficit of just $585 billion one short year ago, a token 40%+ error rate, but in the immortal words of Hillary Clinton: "who cares." Of course we should note that if we apply the same forecast error to the 2013 budget, it means the real final deficit print will be $1.2 trillion - just a tad more realistic.
Lest you think we'll escape the new normal of trillion-dollar deficits in the Obama administration, look no further than the penultimate paragraph from the Associated Press report:
The report warns that actual deficits could easily be higher since CBO is required to assume Congress sticks to the letter of the law.
As I noted before, we just spent $60 billion dollars in hurricane Sandy relief, promptly blowing the entire wad of tax increases we haven't even collected yet.  The CBO is assuming phantom savings from Obamacare and the Medicare "doc fix" will take place, which it won't.  Good luck with that.

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