Last month the Obama administration announced that it is raising its 10-year budget deficit projection from $7.1 to $9 Trillion. This increase puts the White House in line with the Congressional Budget Office Projection (CBO) of $9.3 trillion.
You may remember, during the budget debate the CBO projected that the Obama administration low-balled its stimulus-enhanced deficit by $482 billion over the next four years and $2.3 trillion over the next 10. The President, and his team bashed the CBO for being over-estimating the deficit, but now they have put their projections in line with the CBO . Problem is the CBO/White House estimates are very conservative, they assume that Congress will hold federal spending at the rate of inflation over the next decade–not very likely.
It gets worse, now the President’s own Treasury Department’s Chief Economist warns that forecasts were based on constant growth over the next ten years, which is less likely than Congress holding down costs:
Alan Krueger, assistant secretary for economic policy and chief economist at the Treasury Department, told reporters that the economic projections used by the White House–which foresee a decade of uninterrupted economic growth ahead–are “smoother” than what can be expected in reality.
Even with this smoother-than-reality economic forecast, the administration is predicting that the federal government will run up an additional $905 billion in deficit spending over the next decade, almost doubling the national debt.
Krueger, speaking to reporters at a Friday briefing, said that while the administration’s Gross Domestic Product (GDP) growth forecasts were largely in line with private estimates, numerous factors could affect and alter those estimates.
“It’s the nature of forecasting that forecasts typically are smoother than the realizations,” he said. “Your hope is that the ups and downs balance out and, on average, are on the forecasted path.”
What Krueger did not mention is that, while the administration’s projections are close to those of private economists, known as the Blue Chip Consensus, those private forecasts only extend through 2010, while the White House’s extend through 2019.
..In no year between now and 2019 does the administration plan to balance the budget. In fact, the smallest single-year deficit Obama plans to incur is $739 billion in 2015, after which time the deficit will begin climbing again until it hits nearly $1 trillion ($917 billion) in 2019.
However, Krueger claimed that it was a “very important” part of Obama’s budget to move the country toward “responsible budgeting” and a “more sustainable” path.
Maybe that’s what the SHMOTUS, Joe Biden meant when he said you had to spend money to save money.
Folks this is not some right-wing pundit-speaking…this is Obama’s own Guy. If the President’s deficit projections are right, we have already spent our grandchildren’s money. If they are wrong we can add at least another generation of descendants to our IOU list.