Take a minute from sequester panic— it's just like Sophie's Choice, but with cheetahs!— to think about an even more profound scam emanating from Washington, D.C.: the ridiculous revenue projections that politicians of both parties are banking on to forestall the sort of serious changes to government spending.
Reason columnist and Mercatus Center economist Veronique de Rugy puts the revenue projections from the latest Congressional Budget Office (CBO) budget update in historical perspective. The figures in the chart are adjusted for inflation using 2010 dollars.
You'll note something funny about the blue bars: They never go down. If that happens, it will be the first time is post-World War II history that real federal revenues have had such a sustained rally.
If current law remains unchanged, the CBO estimates…tax collection is projected to double from its 2012 levels to reach $4,961 billion by 2023. This is overly optimistic.
In a companion chart, de Rugy maps the annual percent change in revenue from 1950 through 2023 (the last year covered by the CBO's report). Between 1950 and 2012, the average percent change in revenue was 3.3 percent. For the period between 2013 and 2023, using current law and various rosy scenarios provided by the government, the CBO expects average year-over-year percentage growth to be 4.5 percent.
Magical thinking—it's not just for Joan Didion anymore!
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