CBO’s Budget and Economic Outlook Update

The report is here [pdf] (link fixed 1:50pm Pacific), and the Director’s blog post is here.

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7 thoughts on “CBO’s Budget and Economic Outlook Update

  1. rootless cosmopolitan

    The trash can is quite a good place for this report.
    There isn’t anything in this report that indicates an understanding what caused the economic crisis. It is said the deep recession was triggered by the financial crisis and falling asset prices, as if the financial crisis came out of nowhere and the fall in asset prices is supposedly an abnormality compared to how things should be. Not a word about the excessive levels of private debt accumulated over the last 30 years, which were the fuel for economic expansion in United States and the world economy, and that massive asset price inflation, e.g. in the housing sector and in the stock market, was a consequence of exponential expansion of private debt. Consequently, there isn’t any assessment whether the deeper cause of the crisis has been eliminated or whether it is still present. So the projections are founded on the view things will just go back to normal from here, apparently to some equilibrium according to the neo-classical model world, although somewhat slower than usual.
    I think it’s highly likely that these projections provided by the CBO under this administration will be equally a laugh a few years later as the projections from the Bush administration time have become already.
    rc

  2. Brian Quinn

    Rootless Cosmopolitan,
    CBO is independent of the administration. I believe you are confusing it with OMB.

  3. rootless cosmopolitan

    Brian,
    You are right. I better would have referred to who is controlling congress and senate and their budget committees to put it in a time context.
    Anyway, it doesn’t change anything what I said about the report.
    Here is an example from the past to which I referred:
    http://www.cbo.gov/ftpdocs/89xx/doc8917/Chapter2.6.1.shtml#1070355
    Is there any reason to consider the economic analysis and the projections in the current report as more reliable than those past ones?
    rc

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