Return To Normal Economic Growth Key To Balancing The Budget

forbes ^ | 1-25-2016 | Ryan Ellis

[Citizen Zed]

The new Congressional Budget Office (CBO) Budget and Economic Outlook is out today.

The entire document is 226 pages long, plus an Excel sheet full of useful charts. It:s well worth a read, but I wanted to pull out perhaps the most important table in the whole document. It's in Appendix B, Table 1: "How Selected Economic Changes Might Affect CBO's Baseline Budget Projections." Here is the snippet:

This chart says that for every 0.1 percentage points of higher economic growth, tax revenues will be $286 billion higher (without raising taxes) and spending will be $41 billion lower over the 10-year budget window.

Suppose we were able to restore a normal real economic growth rate, up from the 2 percent level assumed by CBO? If we were to grow at a more normal 3 percent rate, the figures you see in the above table would be multiplied by 10.

Tax revenues would be $2.86 trillion higher over the ten year window. Spending would be $410 billion lower. Put that together, and cumulative deficits would be $3.27 trillion lower.

How much would that help? Here's the CBO budget baseline assuming the slow growth:

As you can see, the 10-year cumulative budget deficit in the "new normal" slow growth scenario is just under $9.4 trillion.

If growth simply returned to the "old normal," that number would be reduced by about 35 percent, by the $3.27 trillion detailed above.

[Citizen Zed]

So says the CBO.

[SubMareener]

In other words: We are so screwed!

[SubMareener]

This is good work, and normal times would get a lot of replies, but these aren’t normal times.

[SkyPilot]

I don't see how, culturally, American can recover. We are not the same people we were 40, 50, or 60 years ago.

Americans used to live for valid work, and would travel almost anywhere in the country to get a job. People worked very hard. Their ethics, morality, and resilience was amazing.

That is not the America of today. A vast, massive swath of Americans are lazy, entitled, out of shape, addicted, vindictive, and mean.

Even if given the opportunity, many would not work hard in valid jobs.

I don't see how America can recover economically when we have so many deadbeats.

[Tax-chick]

“Normal” economic growth is now 0%, due to disincentives imposed by government.

[RockyTx]

economic growth is a thing of the past.

interest rates are zero

everybody I know lives in a giant house,
owns 4 cars,... 2 more than they need.

etc etc etc etc etc etc etc etc etc

[goodnesswins]

Oh wow...had to look close at that picture to understand

[i_robot73]

Oh! You mean in the past ~100yrs., when the Republic was turned into a Democracy and the Constitution to a museum-piece, the Country has gone to sh!t?

Who’d a thunk it!? /s

Sorry, the Socialists won the culture war. We’re reaping the fruits today (see: ANY ‘man on the street’ or any Sanders voter). Too many ‘good’ people refuse to do what is needed to right the course (VOTE, move, home-school, SAVE, ‘hoard’/stock, train).

Unfortunately, they haven’t yet to live in the ‘utopia’ they want; and, are too stupid to learn from those that do/have.

It is times, such as these, I DON’T ache for chance of having children.