Baseball Crank
Covering the Front and Back Pages of the Newspaper
December 28, 2012
POLITICS: CBO Projection Fail

Jim Pethokoukis offers a wonderful example of CBO 10-year projection failure: in 2002, the CBO projected that debt would be 7.4% of GDP by 2012. The actual figure: closer to 74%.

Did a lot of unexpected things happen between 2002 and 2012? Of course they did. They always do. This is precisely why you should never regard 10-year budget forecasts as "facts." It's why I apply what I call Crank's First Law: government budget and financial forecasts are always, always wrong.

Posted by Baseball Crank at 7:13 PM | Politics 2012 • | Politics 2013 | Comments (5) | TrackBack (0)
Comments

A lot of expected things happened between 2002 and 2012 as well. It's no surprise (to those of us paying attention) it will take decades to get out from under the mess the nation was saddled with by the GWB administration.

Posted by: Berto at December 29, 2012 12:08 PM

an unfunded war will blow up any projected budget. I know the details get in the way of any political opinion masked as fact.

Posted by: javaman at December 29, 2012 5:12 PM

You can't call it a failure because some people believe those projections are somehow an accurate prediction of the government's future spending decisions. That's not what they are intended to do. It's a back-of-the-envelope, "all else being equal" analysis of the impact of specific policies. It's not supposed to be perfect.

Posted by: MVH at December 30, 2012 8:05 PM

javaman - You might want to look into when we did most of the debt accumulating in those years. Also, when was the last time we went 10 years without a war, a new federal program or a surprising economic event?

Posted by: Crank at January 2, 2013 6:42 PM

"ou might want to look into when we did most of the debt accumulating in those years."
_____
It was when the economy crashed due to deregulation and lax oversight of the financial industry. And, of course, the epic fraud committed by the banks and Wall Street.

Fun fact: Fraud is still considered a felony and punishable by prison time when committed by the poor and minorities.

Posted by: Berto at January 4, 2013 1:57 PM
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