CBO: Obama Administration's Budget Increases Debt and Reduces Economic Growth

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    Apr 21, 2012 6:56 AM GMT
    Not really shocking that the report was released on a Friday. Of course there are some here who seem to think that they know better than the non-partisan CBO. The Administration has consistently chosen policies that favor special interest groups and an ideological agenda over improving the underlying economic environment.

    This also explains why the Obama Administration and his proxies are pushing all sorts of side arguments in an attempt to distract others from the state of the economy.

    http://www.cbo.gov/publication/42972

    CBO estimates that the President’s budgetary proposals would boost overall output initially but reduce it in later years. For the 2013–2017 period, under most of the estimates CBO produced using alternative models and assumptions, the President’s proposals would increase real (inflation-adjusted) output (relative to that under current law) primarily because taxes would be lower than those under current law, and, therefore, people’s disposable income and their demand for goods and services would be greater.

    Over time, however, the proposals would reduce real output (relative to that under current law) because the deficits would exceed those projected under current law, and the effects of increasing government debt would more than offset the favorable effects of lower marginal tax rates on labor income. When the net impact of those two types of effects would shift from an increase in real output to a decrease would depend on various factors, including the impact of increased aggregate demand on output and the effect of deficits on investment.

    - By CBO’s estimate, under the President’s proposals, the nation’s real output during the 2013–2017 period would be, on average, between 0.2 percent lower than the amount under current law and 1.4 percent higher than under current law.

    - For the 2018–2022 period, CBO estimates that the President’s proposals would reduce real output, on average, by between 0.5 percent and 2.2 percent compared with what would occur under current law.
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    Apr 21, 2012 8:53 AM GMT
    Waiting to hear the CBO described as a bunch of chimpanzees trying to discuss economics. Seems to be the drivel du jour by those who don't like the analysis.
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    Apr 21, 2012 9:18 AM GMT
    socalfitness saidWaiting to hear the CBO described as a bunch of chimpanzees trying to discuss economics. Seems to be the drivel du jour by those who don't like the analysis.


    I'm waiting for you to say the CBO is Dr. Drew... icon_rolleyes.gif
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    Apr 21, 2012 12:40 PM GMT
    riddler78 said
    - For the 2018–2022 period, CBO estimates that the President’s proposals would reduce real output, on average, by between 0.5 percent and 2.2 percent compared with what would occur under current law.


    Do people really expect that the current law will stay in place unchanged until 2018 - 2022?
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    Apr 21, 2012 5:51 PM GMT
    bhp91126 said
    riddler78 said
    - For the 2018–2022 period, CBO estimates that the President’s proposals would reduce real output, on average, by between 0.5 percent and 2.2 percent compared with what would occur under current law.


    Do people really expect that the current law will stay in place unchanged until 2018 - 2022?


    No but these are against baseline measures - in order to say something will rise or fall it has to be relative to something else.

    In this case, the CBO analysis states that Obama's budget proposals result in a significant loss in growth ie jobs especially as years go on given that the cost of borrowing will rise, taxes will increase and the level of debt.
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    Apr 21, 2012 11:48 PM GMT
    southbeach1500 said
    bhp91126 said
    riddler78 said
    - For the 2018–2022 period, CBO estimates that the President’s proposals would reduce real output, on average, by between 0.5 percent and 2.2 percent compared with what would occur under current law.


    Do people really expect that the current law will stay in place unchanged until 2018 - 2022?


    If Democrats keep control of the Senate, then yes, as they haven't bothered to pass a budget in 3 years - something unthinkable, until these current crop of Democrats (Reid, Schumer, Durbin, et al) took over.
    Of course I can blame that quickly to Reps controlling the house and blocking everything significant to keep Obama a one term Prez.
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    Apr 22, 2012 12:57 AM GMT
    southbeach1500 said
    bhp91126 said
    southbeach1500 said
    bhp91126 said
    riddler78 said
    - For the 2018–2022 period, CBO estimates that the President’s proposals would reduce real output, on average, by between 0.5 percent and 2.2 percent compared with what would occur under current law.


    Do people really expect that the current law will stay in place unchanged until 2018 - 2022?


    If Democrats keep control of the Senate, then yes, as they haven't bothered to pass a budget in 3 years - something unthinkable, until these current crop of Democrats (Reid, Schumer, Durbin, et al) took over.


    Of course I can blame that quickly to Reps controlling the house and blocking everything significant to keep Obama a one term Prez.



    Then you don't understand how the budget process works. The House originates the budget and it is then moved to the Senate. The Senate comes up with their version and then the House and Senate go to conference which is where the two versions are melded into one.

    The "blocking" of the budget process is being done by Harry Reid, the Democrat who currently controls the Senate.

    Yeah, right. ...

    icon_wink.gifThe 2013 United States federal budget request for government operations for the 2013 fiscal year (October 2012–September 2013) was submitted by President Barack Obama on February 13, 2012,
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    Apr 22, 2012 1:38 AM GMT
    bhp91126 saidThe 2013 United States federal budget request for government operations for the 2013 fiscal year (October 2012–September 2013) was submitted by President Barack Obama on February 13, 2012,

    Yeah, right. ...

    Do you understand what happened? Of the Obama budget requests, the one submitted in 2011 was defeated 97-0 in the Senate. The one submitted this year was one the Democrats intended to avoid voting on, but the Republicans introduced the parameters of the budget request in an amendment that the House defeated, with no votes supporting it.

    It is inconceivable that no Democrat would vote for the President's budget requests without some pre-coordination between Congress and the White House. The only conclusion was the President's requests were not intended to be taken seriously by him or the Democrats in Congress.

    For its part, the Senate, led by the Democrats has refused to propose a budget in over 1,000 days, completely ignoring the law that requires them to do so, the Congressional Budget Act of 1974. They decided for the second year in a row that it was better politically to let Ryan propose a budget and then take pot shots at it.

    For another take on this, here is an editorial from the Wall Street Journal from early February:

    http://online.wsj.com/article/SB10001424052970204369404577211542150516540.html?mod=ITP_opinion_2

    White House tells Senate Democrats to flout the law

    The Senate last passed a budget 1,106 days ago—that would be almost three years—and now the White House is telling Democrats not to bother this year either. Harry Reid will be pleased, because last week the Majority Leader said he had no plans to do so.

    Asked yesterday about the lack of a Senate budget, spokesman Jay Carney said that “Well, I don’t have an opinion to express on how the Senate does its business with regards to this issue.” ABC’s Jake Tapper pressed, incredulously, “The White House has no opinion about whether or not the Senate should pass a budget?”

    Mr. Carney reiterated that President Obama has “no opinion,” only that he “looks forward to the Senate acting on the policy initiatives contained within his budget.” But Mr. Carney refused to say the Senate should act by even proposing a budget, let alone, you know, actually passing one.

    The running tally of days without a budget has become a Republican talking point, but there’s a lesson here about liberal governance and the Congressional Budget Act of 1974. That law, a Democratic creation, mandates that both chambers by April submit a formal budget blueprint that shows how the government will meet its obligations over the coming year, lays out a general fiscal framework for entitlements and sets priorities for spending and taxes. The law was supposed to increase the incentives for fiscal discipline. But now that House Republicans want to take it seriously, Democrats want to pretend it doesn’t exist.

    Meanwhile, the GOP used its budget last year and will again this year to advance specific and credible alternatives to the Obama status quo. At least Democrats are conceding that they’re unwilling even to suggest solutions of their own.
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    Apr 22, 2012 3:46 AM GMT
    Given the massive ways in which Republicans have flouted or bastardized countless congressional laws and traditions, it's just too bad when the goose doesn't enjoy what was given to the gander.
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    Apr 22, 2012 7:31 AM GMT
    Christian73 saidGiven the massive ways in which Republicans have flouted or bastardized countless congressional laws and traditions, it's just too bad when the goose doesn't enjoy what was given to the gander.


    Well then I'm glad that Democrats have been able to show leadership in this regard...

    oh. wait... icon_rolleyes.gif