Posted on 04/11/2018 6:42:23 AM PDT by SeekAndFind
When the Congressional Budget Office released its updated budget forecast, everyone focused on the deficit number. But buried in the report was the CBO's tacit admission that it vastly overestimated the cost of the Trump tax cuts, because it didn't account for the strong economic growth they would generate.
Among the many details in the report, the one reporters focused on was the CBO's forecast that the federal deficit would top $1 trillion in 2020, two years earlier than the CBO had previously said.
And, naturally, most news accounts blamed the tax cuts. "U.S. budget deficit to balloon on Republican tax cuts" is how Reuters put it in a headline.
But there's more to the story that the media overlooked.
First, the CBO revised its economic forecast sharply upward this year and next.
Last June, the CBO said GDP growth for 2018 would be just 2%. Now it figures growth will be 3.3% — a significant upward revision. It also boosted its forecast for 2019 from a meager 1.5% to a respectable 2.4%.
"Underlying economic conditions have improved in some unexpected ways since June," the CBO says. Unexpected to the CBO, perhaps, but not to those of us who understood that Trump's tax cuts and deregulatory efforts would boosts growth.
In any case, the CBO now expects GDP to be $6.1 trillion bigger by 2027 than it did before the tax cuts.
The CBO report also makes clear that this faster-growing economy will offset most of the costs of the Trump tax cuts.
In a table buried in the appendix of the CBO report, it shows that, before accounting for economic growth, the tax cuts Trump signed into law late last year would cut federal revenues by $1.69 trillion from 2018-2027.
(Excerpt) Read more at investors.com ...
So, if Federal government revenue is UP, why do we have a HUGE DEFICIT?
EASY ANSWER — SPENDING IS THE CULPRIT.
Despite what Democrats and the media insist, the culprit here isn’t tax cuts. It is out-of-control spending, which will be nearly $1 trillion higher over the next decade thanks to recent spending deals.
Read the rest of the article....
Democrats Outraged
Armageddon.
They just can’t stand WORKING AMERICANS keeping more of THEIR money.
While this nugget is welcome...
When is the last time the CBO made a projection that came true?
The tax cuts are being negated by inflation.
Of course.. Tax cuts always bring in more revenue.
Anyone who did not see that coming is blind.
Under Obama we had very little growth, the great recession. Due to high taxes, onerous regulation and a terrible business climate. Obama's solution was "quantitative easing" creating money out of nowhere and spending it on his favorite "projects" mostly welfare.
This is very inflationary and the only reason inflation did not take off was the poor economy.
President Trump has unleashed the economy, which has roared back to life, and we are going to have to live with the pent up inflation of Obama's folly.
I have been saying this for at least 2 years. It is nothing by classic economics.
Put all of your money into hard assets and prosper. Keep it in cash, and bonds and watch it shrink in real value.
...buried in the report was the CBO's tacit admission that it vastly overestimated the cost of the Trump tax cuts, because it didn't account for the strong economic growth they would generate.
Thanks SeekAndFind.
agreed
Stop spamming keywords with personal attacks!
(From the article): ...buried in the report was the CBO’s tacit admission that it vastly overestimated the cost of the Trump tax cuts, because it didn’t account for the strong economic growth they would generate.
WHAT IS THE CBO GOOD FOR AND WHY DO WE STILL GIVE THEIR ESTIMATES CREDIBILITY?
NEVER. The CBO uses static scoring, while the real world is dynamic.
By definition, the CBO can NEVER be correct, yet the demonRATs put all of their votes with them.
We need to grow or we’re going to go bankrupt
We. Can easily grow our way out of Debt
RE: We. Can easily grow our way out of Debt
Not at the rate we are spending. Spending is outpacing GDP growth and revenue, percentage-wise.
Do we have a revenue problem? No. As the CBO points out, we’ve taken in record revenue thanks in part to a recovering job market.
Receipts totaled $3,314 billion in fiscal year 2017, $47 billion more than in FY 2016.
Thus, all the deficit problems were on the spending side of the ledger, which was $130 billion more than last year, totaling almost $4 trillion.
And it was not a problem of increased defense spending. Expenditures for the DOD rose by just one percent.
The single biggest increase was from the Department of Education. Spending rose by $35 billion, a whopping 45 percent increase from last year. Most of that was from increases in student loan subsidies. Hence, much like with health care, the federal government distorts the market, creates an asset bubble for the higher education cartel, which raises prices, and in turn, requires an infinite amount of subsidies.
HUD was also a big budget-buster, increasing spending by $31 billion or 117 percent.
An extra $35 billion was spent on health care programs this past year relative to 2016, as part of the inexorable trend of endless price inflation that creates the “need” for even greater subsidies. Which is why we will never get our fiscal house in order until we end federal market distortions of health care.
And of course, with the increasing debt, interest payments on the debt continue to climb. They rose by $28 billion, or 10 percent from last year. Unless the runaway train is halted, interest on the debt will become the fastest-growing part of the budget, rising from 7 percent of federal spending to 21 percent by 2047.
In short, the failed cycle of government is working as well as it does under any Democrat administration. Welcome to the unibrow party of Republicans and Democrats.
bump
They eventually get it right, like the cranky old engineer who complains that a proposed design won’t possibly work, then has no problem explaining why the successful design, which is selling like hotcakes, was both obvious and trivial in its approach. :^)
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