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Subject: Some interesting CBO data rss

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Mac Mcleod
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Interesting info here:
http://www.cbo.gov/sites/default/files/cbofiles/attachments/...

CBO is normally fairly reliable but I do not see how they are projecting the debt to essentially stop growing in 2015.

Especially with comments like:
Quote:
The deficits projected in CBO’s current baseline are
significantly larger than the ones in CBO’s baseline of
August 2012. At that time, CBO projected deficits total-
ing $2.3 trillion for the 2013–2022 period; in the current
baseline, the total deficit for that period has risen by
$4.6 trillion.


They are projecting revenues and spending to nearly double in only 8 years.

Quote:
2012 2020
Revenues 2,449 4,279
Outlays 3,538 5,078


The bit I was looking for-- and that interests me is that inflation is projected to remain lower than 3% through 2020 (max is actually 2.3%).

Meanwhile
Quote:
The interest rate on 3-month Treasury bills—which has hovered near zero for the past several years—is expected to climb to 4 percent
by the end of 2017, and the rate on 10-year Treasury notes is projected to rise from 2.1 percent in 2013 to 5.2 percent in 2017.


If true, that would be spectacular news. A higher than inflation return on savings with low risk.

While bonds will underperform until the interest rates have finished making the move-- a lot of money might move into bonds once the interest rate move is complete.

 
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Jorge Montero
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Proving once again the importance of forward looking projections coming from the Fed: All of this should not be something the CBO is supposed to estimate, but something we know, because the Fed will do whatever it takes to the monetary base to provide stable NGDP growth.
 
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J
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maxo-texas wrote:
CBO is normally fairly reliable but I do not see how they are projecting the debt to essentially stop growing in 2015.

It will stop growing as a % of GDP, and then start going back up.
 
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Mac Mcleod
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jmilum wrote:
maxo-texas wrote:
CBO is normally fairly reliable but I do not see how they are projecting the debt to essentially stop growing in 2015.

It will stop growing as a % of GDP, and then start going back up.


It looks like they are projecting an essentially flat % of GDP growth through 2024 on page 2. There is a dip but then it rises back to current levels. Am I looking at that right?

So if we have an unexpected period of lower GDP growth, then it will rise more than expected.

The current expansion is about 48 months old. Average expansion since 1945 has been 58 months. An average 11 month contraction with negative GDP growth after that would result in higher than projected debt loads.
(http://www.nber.org/cycles.html)

My S&P500 model and theory jibes with that.

 
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Isaac Citrom
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Not the debt to stop growing. That would be incredible. That would mean a zero deficit and balanced budget!

It's distance, velocity and acceleration.
Debt, deficit, growth of the deficit.

You guys seem to be googlie-eyed with news that the cancer may stop accelerating by 2015. Though by 2015, the cancer should be at a steady rate of growth; such that, there be a steady rate of new cancer cells. The very idea of getting rid of the cancer is not even a twinkle on anyone's mind.

It's the rate of growth of the deficit that may be zero by 2015. The deficit will still be huge and the debt will continue to increase at a steep climb.

As the debt is cumulative, the problem of servicing it grows accordingly.


As a lay person in economics, I'm trying to understand what you guys are so happy about if not just calm. My intuition tells me this is horrific. But, I figure "you guys" must know what you're talking about. Then, on a regular basis, "looks like an extinction level civilization-ending financial meltdown; oops, sorry, we got that wrong." So, I start to wonder whether "you guys" know what the fuck at all you're talking about.
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Mac Mcleod
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isaacc wrote:

Not the debt to stop growing. That would be incredible. That would mean a zero deficit and balanced budget!

It's distance, velocity and acceleration.
Debt, deficit, growth of the deficit.

You guys seem to be googlie-eyed with news that the cancer may stop accelerating by 2015. Though by 2015, the cancer should be at a steady rate of growth; such that, there be a steady rate of new cancer cells. The very idea of getting rid of the cancer is not even a twinkle on anyone's mind.

It's the rate of growth of the deficit that may be zero by 2015. The deficit will still be huge and the debt will continue to increase at a steep climb.

As the debt is cumulative, the problem of servicing it grows accordingly.


As a lay person in economics, I'm trying to understand what you guys are so happy about if not just calm. My intuition tells me this is horrific. But, I figure "you guys" must know what you're talking about. Then, on a regular basis, "looks like an extinction level civilization-ending financial meltdown; oops, sorry, we got that wrong." So, I start to wonder whether "you guys" know what the fuck at all you're talking about.
.


I don't see anything "extinction level civilization-ending" about the U.S. debt yet.

Not even through 2025.

I would greatly prefer that we ran a small credit each year so the debt was shrinking. I think it's a serious problem that will threaten services and our military strength at some point.

But nothing "extinction level civilization-ending".

(and I'm admittedly not an economic expert so we could be having one).
 
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Boaty McBoatface
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maxo-texas wrote:
isaacc wrote:

Not the debt to stop growing. That would be incredible. That would mean a zero deficit and balanced budget!

It's distance, velocity and acceleration.
Debt, deficit, growth of the deficit.

You guys seem to be googlie-eyed with news that the cancer may stop accelerating by 2015. Though by 2015, the cancer should be at a steady rate of growth; such that, there be a steady rate of new cancer cells. The very idea of getting rid of the cancer is not even a twinkle on anyone's mind.

It's the rate of growth of the deficit that may be zero by 2015. The deficit will still be huge and the debt will continue to increase at a steep climb.

As the debt is cumulative, the problem of servicing it grows accordingly.


As a lay person in economics, I'm trying to understand what you guys are so happy about if not just calm. My intuition tells me this is horrific. But, I figure "you guys" must know what you're talking about. Then, on a regular basis, "looks like an extinction level civilization-ending financial meltdown; oops, sorry, we got that wrong." So, I start to wonder whether "you guys" know what the fuck at all you're talking about.
.


I don't see anything "extinction level civilization-ending" about the U.S. debt yet.

Not even through 2025.

I would greatly prefer that we ran a small credit each year so the debt was shrinking. I think it's a serious problem that will threaten services and our military strength at some point.

But nothing "extinction level civilization-ending".

(and I'm admittedly not an economic expert so we could be having one).
I don't see anything "extinction level civilization-ending" about the U.S. debt at all, the USA may collapse, the rest of civilization will pull through, and no doubt will finance the building of a new America just like it did the old one.
 
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