August 26, 2009: CBO Budget Deficit Estimates
The CBO has now followed the OMB in revising its budget deficit estimates for the next decade. CBO's new estimate of $7.14 trillion is almost $2 trillion less than OMB's $9 trillion estimate because of some of the ridiculous assumptions used by CBO. That said, CBO's new estimate is a whopping 60% increase over its previous estimate of $4.4 trillion from March 2009. The OMB revision was up by only about 25% from its previous estimate. These revisions point to four conclusions:
(1) The current Congress it out of control with its spending.
(2) The level of confidence that you should place in these estimates is near zero; the actual numbers are more likely to be triple current estimates, as we saw with the recent "cash-for-clunkers" program.
(3) No matter how much you earn or what your party affiliation, your taxes are going to skyrocket during the coming years.
(4) Inflation is going to become a leading economic concern during the coming years; look for double-digit interest rates by 2011.
