tag:blogger.com,1999:blog-5776375569387669394.post279984325910203540..comments2023-10-19T10:43:38.825-04:00Comments on Free Advice: Scary CBO ChartBob Murphyhttp://www.blogger.com/profile/04001108408649311528noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-5776375569387669394.post-32321821209562588662009-10-13T10:49:08.772-04:002009-10-13T10:49:08.772-04:00The Blackadder Says:
I think I need a drink.The Blackadder Says: <br /><br />I think I need a drink.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5776375569387669394.post-7780709789130062052009-10-13T10:37:05.532-04:002009-10-13T10:37:05.532-04:00Oh sorry for the confusion; the explanation of the...Oh sorry for the confusion; the explanation of the graph inside the report itself is clearer than on the cover.<br /><br />Actually Blackadder you got it backwards; if politicians behave as they have in the past, then it's the huge line.<br /><br />I don't know exactly what assumptions are different. If I had had to guess, I would have made the same mistake you did, Blackadder, but I think the CBO is trying to say that extending the baseline is misleading, because politicians never adhere to the long-range budget plans.<br /><br />One specific example I can give you is the Alternative Minimum Tax. It was set up back in the day to prevent millionaires from getting away with paying no income tax (through loopholes), but after bracket creep etc. it would hit middle-class families. So every relevant period (not sure if they do it every fiscal year), Congress exempts people from the AMT.<br /><br />So if you ask, "What happens if Congress does nothing, and we let all policies revert to their defaults and let the thing go on autopilot?" then you bring in more revenue once the current AMT exemptions expire.<br /><br />But I admit, I have no idea what's driving up the one line versus the other. You would assume that the top one would mean, "If we don't get entitlements under control."<br /><br />Oh you know what? I betcha a lot of it is factoring in what the Obama administration says it's going to do, like health care etc. Technically that stuff isn't law yet. So I bet that's the reason for the huge difference.<br /><br />To see this, note that in 2019, the top line has debt/GDP around 80%. That's the figure being thrown around in the press for the Obama plans.<br /><br />So really those two lines must be showing the difference between Obama and status quo!Bob Murphyhttps://www.blogger.com/profile/04001108408649311528noreply@blogger.comtag:blogger.com,1999:blog-5776375569387669394.post-77455910982216396052009-10-13T09:54:01.695-04:002009-10-13T09:54:01.695-04:00The Blackadder Says:
Presumably the scary line i...The Blackadder Says: <br /><br />Presumably the scary line is based on the "we do nothing" assumption, and the non-scary one is based on the "we do what we've always done in the past" assumption. Since the non-scary assumption is more likely, the overall chart doesn't scare me too much, though I admit that the CBO probably meant for it to scare people.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5776375569387669394.post-45050839368690143482009-10-13T09:29:48.637-04:002009-10-13T09:29:48.637-04:00So which line is "the latter"?So which line is "the latter"?gcallahhttps://www.blogger.com/profile/10065877215969589482noreply@blogger.com