Future Deficits Now Projected to be Even Bigger

Whitehouse.govWhitehouse.govAmerica’s current budget deficits have shrunk dramatically over the past few years. But its future deficits are now projected to be bigger than previously expected. When the Congressional Budget Office (CBO) released its updated economic outlook earlier this week, it painted a gloomier picture than it did the previous year. The deficit is now projected to rise by $7.3 trillion over the next decade, a $1 trillion increase since the CBO’s last estimates were published. 

That’s not great news. But it’s actually worse than it sounds. As the budget analysts at the Committee for a Responsible Federal Budget explain, this actually understates the size of the increase.

That’s because last year’s deficit totals were artificially inflated because of a scoring convention that required the budget office to count $425 billion worth of one-time spending on Hurricane Sandy as a recurring annual expense. That assumption is gone this year, but it means that last year’s 10-year deficit total was actually more like $5.9 trillion.

The projections worsen further if you update the time frame. Last year’s projections looked at the 2014-2023 budget window. This week’s report stretches from 2015-2024. Since annual deficits are now expected to grow at a greater clip, that makes for a bigger change. Here’s the CRFB’s graph showing the actual size of the change:

Committee for a Responsible Federal BudgetCommittee for a Responsible Federal Budget

The main reason for the update is that the CBO now foresees slower economic growth over the next decade than it used to. “By 2017,” the budget office report said, “CBO expects that economic growth will diminish to a pace that is well below the average seen over the past several decades.” And the accumulating debt won’t exactly help. The “large and growing federal debt” the CBO expects the nation to shoulder could have “serious negative consequences, including restraining economic growth in the long term.”

So because economic debt is expected to slow, we’ll take on more debt—which could slow growth even further. It’s potentially a rather ugly feedback loop of slow growth and higher debt. 

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  • iEagleHammer||

    Does this mean I'll have more freedom to become an artist?

  • fish_remote||

    We're all hoping that you succeed! Nancy Pelosi most of all!

  • Paul.||

    Yes, because apparently it is my obligation to not be an artist so that I may finance and facilitate your being an artist. More freedom all around.

  • The Late P Brooks||

    The main reason for the update is that the CBO now foresees slower economic growth over the next decade than it used to.

    Reality mocks your rate of return projections, Congress.

  • ||

    Yet Congress doesn't care, because reality doesn't exist for them after they leave office.

  • Francisco d Anconia||

    THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS THIS

  • John||

    They will always have theirs.

  • wareagle||

    and many of them will have yours, too.

  • ||

    What's yours is mine and what's mine is mine

  • fish_remote||

    Government fudging the numbers!

    That's unpossible!

    PS: CHRIZTFEGDICKWEEDSHRIKEPIGFUCKSTICK

  • Duke Trshmnstr of Stench||

    NEEDS MOAR BOOOOOOOOOOOOOSH

  • Mike M.||

    Frankly, I don't know how anyone can look at that graph without laughing.

    Who here seriously believes that debt as a percentage of GDP is actually going to DECREASE for the next four to five years, given this economy and this administration's policies?

  • fish_remote||

    Because Krugman.

  • iEagleHammer||

    You mean you don't know?

    Since unemployed people create money, the deficit will shrink!

  • Sevo||

    And if congress and Obo get their way, we'll have TONS of unemployed people!
    We'll be just like FRANCE!

  • Killaz||

    The New Freedom. It's going to be their version of Contract With America.

  • Homple||

    More immigrants and the Underwear Gnomes will make this happen. Just you wait and see.

  • Rasilio||

    Sure it could happen, given that GDP includes government spending, it is entirely possible they could inflate GDP faster than they spend for a little while more. Bubbles do tend to work that way.

  • Specail Sauce||

    I don't see a line on your propaganda graph that takes into account the debt multiplier effect on the deficit.

    /Progtard

  • Root Boy||

    You also missed a great article on Yahoo on how the tiny $500B deficit for this year shows how awesome Obama is.

    Biggest reduction evah! The obots in comments were sweet.

    Also, CBO projections suck.

  • ||

    On the bright side, at least Obama is finally taking credit for something 5 years into his presidency. His previous 4 budget years wear all BOOOOOOOSH

  • Root Boy||

    He also takes credit for 8 million zillion jobs created even though less people are working now than in 2008.

  • Doctor Whom||

    I keep telling you folks: When anything good happens, Obama deserves the credit. When anything bad happens, it just shows how powerless Obama is.

  • The Late P Brooks||

    Drum circles really boost productivity.

  • GILMORE||

  • Irish||

    Nothing says "We are adults with serious concerns" like having a hand sign that you call 'up-twinkles.'

  • GILMORE||

    But the wiener said.... that.... money..... there was less debt because.... WHY DO YOU CONFUSE ME SO!??

  • Hugh Akston||

    That’s because last year’s deficit totals were artificially inflated because of a scoring convention that required the budget office to count $425 billion worth of one-time spending on Hurricane Sandy as a recurring annual expense.

    Can anyone tell me what distinguishes a federal budget from total fiction?

  • SusanM||

    Fiction is sometimes believable.

  • tarran||

    Total fiction has to have some degree of plausibility in order to earn the willing suspension of disbelief in the viewer/listener/reader.

  • Square||

    The crucial difference is in the WILLING suspension of disbelief.

  • Paul.||

    Can anyone tell me what distinguishes a federal budget from total fiction?

    It's might be possible to create an Arc reactor.

  • Grand Moff Serious Man||

    I can see the similarities with religious fiction.

  • Root Boy||

    Love these rules that Congress puts in. They can't even fix simple BS assumptions because we had to spend 20B on NJ Fat Boy ads for tourists to come to the Jersey Shore.

  • Homple||

    Mark Twain correctly said that "fiction is obliged to stick to possibilities". That is the difference between the federal budget and fiction.

  • sarcasmic||

    Alternate alt-text: It's a rainbow ski-jump in Sochi!

  • Francisco d Anconia||

    The “large and growing federal debt” the CBO expects the nation to shoulder could have “serious negative consequences, including restraining economic growth in the long term.”

    No, no, no. You have it all wrong. More government spending leads to a more robust economy.

    /Tony

  • sarcasmic||

    Increase the g in c+g+i+(x-m) and the economy grows! It's magic!

  • playa manhattan||

    Krugman: "Can you dumb it down a shade?"

  • Pro Libertate||

    That's unfair. He's a serious economist with a Nobel Prize. No, what he would do is divide the deficit by zero--problem solved! This is a valid process, known as repoliticizing. Repoliticization establishes a relationship between parameters in the theory, when the parameters describing large deficit scales differ from the parameters describing small deficit scales, like those in the ordinary household.

  • sarcasmic||

    My head hurts.

  • Pro Libertate||

    Here, let me repoliticize it for you. You'll feel fine and will let the party tell you how to vote.

  • Ayn Random Variation||

    In the long run we're all dead.

  • Grand Moff Serious Man||

    We just need another New Deal. After all, surely you don't hate murals and object to people getting paid to destroy crops and lean on shovels!

  • playa manhattan||

    My favorite stimulus project: They spent 10 million dollars demolishing a street in Palos Verdes Estates and rebuilding it exactly the way it was before.

  • iEagleHammer||

    I can't comment on the dollar amount, but they ground down and repaved the bridges on a local highway near me... but repaved them WORSE THAN BEFORE BY FAR. I think the next stimulus package should buy all of us who have to drive on it new shocks and struts.

  • Paul.||

    Well, Hoover Dam is apparently reaching the end of its serviceable life.

  • Pro Libertate||

    We should rebuild it, using. . .a herring! Well, perhaps a series of herrings, used by several hundred thousand workers.

    How long before the government proposes a new CCC?

  • wareagle||

    can the herring be red? Please please please?

  • Pro Libertate||

    I grant you this boon.

  • Mike M.||

    Good luck rebuilding Hoover Dam with today's EPA!

  • Paul.||

    Waivers

  • JWatts||

    "We should rebuild it, using"

    Why do you hate Gaia? We should knock it down and let the Earth be free.

  • playa manhattan||

    I think we should build a new dam 100 ft downriver, and then dynamite the hoover dam on pay per view.

  • ||

    Well, Hoover Dam is apparently reaching the end of its serviceable life.

    I thought the cement wasn't even gonna finish curing for another million zillion years or something?

  • Square||

    There's much more to a dam than cement.

  • John||

    That and cutting future growth is austerity.

  • Pro Libertate||

    You say you are lying, but if everything you say is a lie, then you are telling the truth, but you cannot tell the truth because everything you say is a lie, but you lie. You tell the truth but you cannot for you lie. . .illogical! Illogical! Please explain! You are a politician. Only politicians can explain their behavior! Please explain!

    --Signed, America

  • Francisco d Anconia||

    Norman coordinate. Boooooooooooooooooooooooooop.

  • Pro Libertate||

    Vote Norman--the logical choice.

  • Notorious G.K.C.||

    "Projected to be Even Bigger"

    That's what *she* said.

    USA! USA! USA!

  • Almanian!||

    USA! USA! USA! USA!

    /Morning Twilight in America

  • Notorious G.K.C.||

    Yeah, it's Twilight: Team Obama versus Team Boehner.

  • JWatts||

    Would that be Black and Tan?

  • OldMexican||

    And then we'll be hearing once again from the liberal punditry that deficits don't matter because it's "money we owe to ourselves" as if government was really (oh, the naive and stupid fools!) "ourselves."

  • Doctor Whom||

    The key is to have two mutually exclusive arguments about deficits, one to use when your team is in the White House and one to use when the other team is in the White House.

  • Root Boy||

    You don't even have to wait for the team to change. During the first term progs said deficits don't matter, now they are cheering on the reduction since 2011 as a major Obama accomplishment (see post above).

    They will be back to deficits don't matter (or are good - Krugtard) as soon as they creep back up.

    I tell my kids - sorry, but here's your bill.

  • John||

    Every time I meet a liberal who is going on about the children and this or that I always ask them, "so leaving them a bankrupt government and debt that will never be paid is the way to protect them?".

    They never react well to that question for some reason.

  • Pro Libertate||

    They think we can coast along indefinitely, spending far more than we have. It's irrational, but it's also true.

  • John||

    Or that if we just keep spending the economy will boom and end the deficit, which is even more irrational.

  • Pro Libertate||

    And even more false. They don't really understand--at all--why the U.S. has been historically successful, economically.

  • wareagle||

    they keep pointing to the European social democracies, conflating them with flat-out socialism, and presenting it as though Denmark = US, plus or minus a few million acres. And a heterogeneous society. But totally alike.

  • Pro Libertate||

    That, and also the small fact that the U.S. is Europe's defense, with the cost savings that implies. . .for Europe and the fact that Europe, China, and most economic powershouses depend incredibly on the production and consumption engine that is the U.S.

  • JWatts||

    No, it's bigger than that.

    The US subsidizes Europe's defense.
    The US subsidizes Europe's drug research.
    And middle class taxes are far higher in Europe.

    Those are the issues that the Left generally hand waves away.

  • Pro Libertate||

    Oh, yes, I forgot about medicine. Nice to have the U.S. subsidizing your socialism, isn't it?

  • Francisco d Anconia||

    This is, unfortunately, very true. It's amazing how little you can spend when someone else provides your defense.

  • ||

    You know, I'd be willing to give Keynesism a chance if it could be guaranteed that the spending would be reduced when the economy was booming. But progressives (of the red or blue variety) don't even think of scaling back when things are good.

    Of course this is a complete bastardization of Keynes, but don't tell them that.

  • Homple||

    "it is by all means to be believed, because it is absurd".
    -Tertullian

    Brush up on your Latin folks, the Age of Faith is back again.

  • Notorious G.K.C.||

    Tertullian would say, "really? Do those Democrats think we're idiots?"

  • Square||

    They blame the deficit on Republicans.

  • JWatts||

    Absolutely, every Obama deficit is directly attributable to Bush. Indeed, every deficit of a Democratic President is the fault of his Republican predecessor.

    And if a Republican President inherits a deficit from a Democrat, it's the fault of the Republican's in Congress.

    /derp

  • ||

    That's because you're functionally retarded and they feel sorry for you.

    The government can't go bankrupt because it's money we owe ourselves.

    /Tony (and every other prog)

  • The Late P Brooks||

    In the long run we're all dead DOOOOOOOOOOOOMED.

  • The Late P Brooks||

    They think we can coast along indefinitely, spending far more than we have. It's irrational, but it's also true.

    "I can't be out of money, I still have checks."

  • atilla-reas||

    When % rates go UP, and they will soon, our USA debt will balloon up huge time because to FEED our debt we will be forced to pay MORE % on our bonds and T-billsin the open market.
    Hopefully O won't be around then but the DEMS will blame R's in power when the reckless spending and borrowing was DONE by O and his Dem minions.

  • Duelles||

    Does this account for any rise in interest rates? If our debt is at $20 trillion @ 5% ($1 trillion) that would be 1/2 our current tax revenue to cover debt. A Carter era economy might mean $4trillion to cover interest on debt @20% rates. I do hope history beats the crap out of the bastards running the country today.

  • concerned cynic||

    A forecast deficit simply means that forecast expenditure exceeds forecast tax revenues.

    The expenditure problem is the soaring cost of Medicare, Disability, and Old Age Insurance. If:
    * the US military withdraws entirely from the middle east, and the USA return to the defence posture of the late 1990s;
    * the remit of VA hospitals is expanded to cover anyone on Medicare, and Medicare reimbursement rates are curtailed;
    * SS benefits are made fully taxable, are indexed to the lesser of CPI inflation and wage growth, and all benefits exceeding, say, $2000/month/household are trimmed by 10%,

    then future expenditure will be gradually decreased.

    If the Federal govt. would undertake fundamental tax reform, in particular taxing all value added by business and all cash benefits paid by govt. at a flat rate, collecting all taxes at the source, and paying all legal residents of the USA $4400/month, then Federal govt. revenue would rise above projections. Also, stop the use of transfer prices to shift the profits of USA multinationals to foreign subs in low tax jurisdictions.

    I submit that if Congress really wanted to, it could reduce the average deficit per decade to about 1% of GDP.

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