CBO: Trillion dollar deficits through 2017.

[Atreus21]

http://www.politico.com/news/stories/0112/72205.html

The government faces a fourth year of trillion-plus deficits in 2012, according to new projections released Tuesday—numbers which also show little relief in the future unless Washington comes to grips with needed changes in its tax and spending policies.

Like Aunt Cassandra coming down from the attic, the Congressional Budget Office steps squarely into the 2012 campaign season with the 147-page report which might have been subtitled “It’s not just the economy stupid, it’s also the debt.”

The $1.079 trillion deficit now projected for this fiscal year ending Sept. 30 is a step backwards from what CBO had predicted in August. And to punch home its message, the non-partisan agency outlines an especially grim scenario in which Congress not only extends all the current Bush-era tax cuts but pulls the plug on the $1.2 trillion in sequester set in motion by the Budget Control Act last summer.

Under this scenario—which can’t be ruled out politically—deficits would stubbornly hover just under $1 trillion through 2017, adding another $4.7 trillion altogether to the mounting federal debt.

Under the more prudent—and many would say unrealistic— scenario of ending tax breaks and implementing cuts, the cumulative deficits would be $1.72 trillion or $3 trillion less from 2013-2017. But even this path comes with a warning from CBO: that debt service costs are already on the rise and will command an ever greater share of the annual budget.

“The federal budget remains out of balance throughout the decade,” the report reads. “The resulting accumulation of debt, along with rising interest rates, drives up the cost of financing that debt; in CBO’s projections, net interest costs grow significantly from 1.4 percent of GDP this year to 2.5 percent in 2022.”

FUN!

At this point I don't even know why the CBO tracks this stuff. It's not like anyone's serious about reform. It's going to hum merrily along until it crashes.

I'm totally optimistic!

EDIT: As eskimo pointed out, the CBO doesn't say that deficits will run through to 2017, but only that they will run through 2017 in a scenario in which Congress neither retires the Bush tax cuts nor pulls the plug on some aspect of the Budget Control Act. How do I change the OP title?

 

[PokerGuy]

We just need to raise taxes on the 1%, have them pay their fair share you know! Clearly, that's the problem, not spending.

</idiot liberal mode>

 

[fskimospy]

We just need to raise taxes on the 1%, have them pay their fair share you know! Clearly, that's the problem, not spending.

</idiot liberal mode>

What's awesome is that in this thread the CBO specifically mentions not taxing the rich as one of the primary drivers of this debt going forth.

Gotta read some, brotha.

 

[Todd33]

We just need to raise taxes on the 1%, have them pay their fair share you know! Clearly, that's the problem, not spending.

</idiot liberal mode>

1. Bush Tax cuts
2. Recession (less revenue, more spending on safety net)
3. Two wars

It is going to take a bit more than some spending cuts if you want a balanced budget, you need a retrun to the Clinton years, more tax revenue and less war.

 

[PokerGuy]

What's awesome is that in this thread the CBO specifically mentions not taxing the rich as one of the primary drivers of this debt going forth.

Gotta read some, brotha.

What's awesome is that you consider the "Bush tax cuts" the same as "not taxing the rich". Perhaps you need to go read some?

No amount of spin and liberal "logic" is going to fix the problem: spending rises faster than the economy can grow. No amount of taxation can fix that in the long run. Spending MUST be brought in line with the growth rate of the economy.

 

[PokerGuy]

It is going to take a bit more than some spending cuts if you want a balanced budget, you need a retrun to the Clinton years, more tax revenue and less war.

"Some" spending cuts? There have not been ANY actual cuts. There never are. What they call "cuts" are actually simply reductions in the planned amount of increase in spending. I've yet to see actual year over year decreases in overall spending. Until we see that, we're still heading in the wrong direction.

The government is like a drunk on the side of the road asking for money. Giving him more money isn't going to fix anything. Fixing how and where he spends that money is the only solution.

 

[piasabird]

The USA is almost in default now!

What happens when all the SS checks are returned for insufficient funds?

 

[BoberFett]

What's awesome is that in this thread the CBO specifically mentions not taxing the rich as one of the primary drivers of this debt going forth.

Gotta read some, brotha.

You're a despicable liar. Quote where it calls it a "primary driver" or get out of here, liar.

 

[piasabird]

New York State went into default in the 70's. The same thing can happen to the United States. If you dont belive this your are ignoring history! Ignore history at your own peril. Utopian society is not possible.

 

[fskimospy]

You're a despicable liar. Quote where it calls it a "primary driver" or get out of here, liar.

It's one of the two things specifically mentioned in the article. I guess they could have been referring to small aspects of it instead of big ones, but a cursory review of the budget over the next 10 years would easily show you otherwise.

Why do you so easily fly off the handle when you know so little of what you're talking about?

 

[fskimospy]

New York State went into default in the 70's. The same thing can happen to the United States. If you dont belive this your are ignoring history! Ignore history at your own peril. Utopian society is not possible.

It is literally impossible for the US to default unless we choose to. I mean that: literally impossible.

 

[MotF Bane]

We will be lucky to see the deficit increase be so small.

 

[fskimospy]

Oh also, title is misleading. The article does not say there will be trillion dollar deficits through 2017, it says that such deficits would stick close to $1 trillion if a bunch of things happen, not that they will do so under current policy.

 

[Atreus21]

1. Bush Tax cuts
2. Recession (less revenue, more spending on safety net)
3. Two wars

It is going to take a bit more than some spending cuts if you want a balanced budget, you need a retrun to the Clinton years, more tax revenue and less war.

Nnnno. The principal black-hole of our expenditures are entitlements.

 

[BoberFett]

It's one of the two things specifically mentioned in the article. I guess they could have been referring to small aspects of it instead of big ones, but a cursory review of the budget over the next 10 years would easily show you otherwise.

Why do you so easily fly off the handle when you know so little of what you're talking about?

Then quote it from the article. It's very simple. You can shut me up right now by showing me the quote from the article that backs up your assertion that not taxing the wealthy is a primary driver for the deficit.

 

[fskimospy]

Then quote it from the article. It's very simple. You can shut me up right now by showing me the quote from the article that backs up your assertion that not taxing the wealthy is a primary driver for the deficit.

/facepalm

What I'm doing is called 'reading comprehension'. Try it sometime!

 

[senseamp]

Get rid of Bush tax cuts and payroll tax cap.
That will go a long way.

 

[BoberFett]

/facepalm

What I'm doing is called 'reading comprehension'. Try it sometime!

In other words, you can't because that's not what it says.

Tax cuts for the wealthy are just a small portion of the tax cuts overall. You inflated that into a "primary driver."

You're a pathetic troll and a liar. But I guess that's what to expect from partisan hacks like you.

 

[fskimospy]

In other worse, you can't because that's not what it says.

Tax cuts for the wealthy are just a small portion of the tax cuts overall. You inflated that into a "primary driver."

You're a pathetic troll and a liar. But I guess that's what to expect from partisan hacks like you.

lol. Sure I am. I'll let people who can actually read decide. Enjoy your ragegasm though!

 

[BoberFett]

lol. Sure I am. I'll let people who can actually read decide. Enjoy your ragegasm though!

Typical Democrat. And we're supposed to trust your party to be honest, as opposed to those evil, evil Republicans. You are what's wrong with this country. Dishonest to the end.

 

[fskimospy]

Typical Democrat.

Oh I'm not a Democrat. I'm considerably more liberal than the Democratic Party.

 

[BoberFett]

Oh I'm not a Democrat. I'm considerably more liberal than the Democratic Party.

You mispelled "illiterate."

 

[woolfe9999]

Here is the CBO report which is the source for the article:

http://www.cbo.gov/doc.cfm?index=12699

These are the "worst case scenario" conditions that must all occur for the "trillion are a year" deficits:

* Expiring tax provisions (other than the payroll tax reduction) are extended [under current law, those expirations will boost individual income taxes in a variety of ways by amounts totaling $3.8 trillion from 2013 through 2022];
* The AMT is indexed for inflation after 2011 [under current law, its parameters are fixed, and the number of taxpayers affected by the AMT will jump from 4 million in calendar year 2011 to 30 million in 2012];
* Medicare&#8217;s payment rates for physicians&#8217; services are held constant at their current level [under current law, those rates are scheduled to drop by 27 percent this March and more in later years]; and
* The automatic spending reductions required by the Budget Control Act do not take effect [under current law, they will impose reductions totaling about $109 billion a year starting in January 2013].

In sum: 1) Bush tax cuts fully extended, 2) AMT is increased over time, 3) Medicare reimbursement rates are held fixed rather than decreased per current law, and 4) the spending reductions passed into law are 100% repealed.

If NONE of these things occur, then CBO projects that:

Over the next few years, projected deficits in CBO&#8217;s baseline decline markedly, dropping to under $200 billion and averaging 1.5 percent of GDP over the 2013&#8211;2022 period.

Obviously, if some of these occur and not others the result will be in between. The useful information here is that we know what we need to do to control the deficit in the near term: not do anything different than what the current law provides, including allowing laws that are set to expire to do so.

- wolf

 

[fskimospy]

You mispelled "illiterate."

You're terrible at this.

 

[Atreus21]

Here is the CBO report which is the source for the article:

http://www.cbo.gov/doc.cfm?index=12699

These are the "worst case scenario" conditions that must all occur for the "trillion are a year" deficits:



In sum: 1) Bush tax cuts fully extended, 2) AMT is increased over time, 3) Medicare reimbursement rates are held fixed rather than decreased per current law, and 4) the spending reductions passed into law are 100% repealed.

If NONE of these things occur, then CBO projects that:



Obviously, if some of these occur and not others the result will be in between. The useful information here is that we know what we need to do to control the deficit in the near term: not do anything different than what the current law provides, including allowing laws that are set to expire to do so.

- wolf

I'm still kind of annoyed that we talk about a 200 billion dollar deficit as if its acceptable.