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Changes in CBO's Baseline Projections Since January 2001
www.cbo.gov ^ | May 2011 | Congressional Budget Office

Posted on 08/14/2011 4:32:54 PM PDT by MontaniSemperLiberi

I've posted a few numbers from this resource in response to some posts on FR and thought it would be helpful to do a graph showing them in a more intuitively understandable way "just what the heck happened". Note I tried to put a minimum amount of opinions into the graph. The colors were all picked by excel. I used somewhat subtle coloring in the notes (greys, light reds, light greens, etc.) I used the CBO numbers without comment.

Below I will post the graph. Click on the link to get the CBO web page and a link to a two page pdf with the raw numbers.

To be honest, I'm also hoping for some help from my fellow FReepers. For instance I found a typo just before hitting "Post". More importantly, please offer any and all help making the graph more clear. Two heads are better then one. Thanks.

(Excerpt) Read more at cbo.gov ...


TOPICS: Business/Economy
KEYWORDS: budget; spending; tax
Changes in CBO's Baseline Projections Since January 2001
1 posted on 08/14/2011 4:32:57 PM PDT by MontaniSemperLiberi
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To: MontaniSemperLiberi

This certainly illustrates the negative influence of the Dem Cngress. Viewed another way, it emphasizes the folly about not doing anything about ANWR and other energy policies during the period when we had both a Dem House and Dem Senate. Unfortunately, my Congressman was instrumental in keeping the ANWE=R drilling permission from coming to a vote in 2003. The Senate had already approved it, and I think Bush would have signed it.

My Congressman (otherwise a dependable conservative Republican vote) personally refused to bring it to a vote. I had a big argument with him at his Town Hall the following weekend and got nowhere. His motivation was to “use up everybody else’s oil before we use ours.” He had several other specious excuses too. Those wells would be producing now, if he had brought it to a vote. 100,000 Americans would be employed in the oil industry, and gas probably would be around $2.25 per gal.Our economy would look quite different, I think.

Well, he won’t be my Congressman much longer. He’s been re-districted out of my region.


2 posted on 08/14/2011 4:45:47 PM PDT by afraidfortherepublic
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To: MontaniSemperLiberi

cool chart. depressing, but cool.

and it is clear what happens, as the Democrats get more control.


3 posted on 08/14/2011 4:49:49 PM PDT by Elendur (It is incumbent on every generation to pay its own debts as it goes. - Thomas Jefferson)
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To: afraidfortherepublic
This certainly illustrates the negative influence of the Dem Cngress.

We can spin it in our own views. The chart as others have, show a basic housing and commercial bubble. It's not like the Congress set the interest rates ala the Fed.

4 posted on 08/14/2011 4:54:48 PM PDT by Palter (Celebrate diversity .22, .223, .25, 9mm, .32 .357, 10mm, .44, .45, .500)
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To: MontaniSemperLiberi

Nice job. Bumping.


5 posted on 08/14/2011 5:01:39 PM PDT by Sgt_Schultze (A half-truth is a complete lie)
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To: MontaniSemperLiberi

Absolutely great chart. Any limits on reuse?


6 posted on 08/14/2011 5:03:15 PM PDT by DaxtonBrown (HARRY: Money Mob & Influence (See my Expose on Reid on amazon.com written by me!))
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To: DaxtonBrown

Reuse away my FRiend. I’m still hoping to get some ideas for improvements so I may have updates. If I do, I’ll post them to this thread.


7 posted on 08/14/2011 5:05:19 PM PDT by MontaniSemperLiberi (Moutaineers are Always Free)
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To: MontaniSemperLiberi

Hmm. Look what happened when the Dems took the House in 2007. A cynical man might think they trashed the economy to make Bush look bad.


8 posted on 08/14/2011 5:10:06 PM PDT by ez ("Abashed the Devil stood and felt how awful goodness is." - Milton, "Paradise Lost")
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To: Palter

Thanks. Causes can be debated. Certainly Freddie/Fannie were a contributor and their effect is only barely implied.

The converse is that the only reason 2007 was a good year for the deficit is because we were at the height of the housing bubble. The effects of it bursting were extensive. We shouldn’t count on that kind of an economy to “grow our way out of it”.


9 posted on 08/14/2011 5:16:41 PM PDT by MontaniSemperLiberi (Moutaineers are Always Free)
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To: MontaniSemperLiberi
No, your right. We are gonna wish we were Japan after our economic handmaidens get through with us. We have no savings to fall back like the Japanese, nor is their welfare state like ours.

Unfortunately, it will get worse. Japan has a lost decade[s?], we have lost generation.

10 posted on 08/14/2011 5:25:50 PM PDT by Palter (Celebrate diversity .22, .223, .25, 9mm, .32 .357, 10mm, .44, .45, .500)
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To: Palter; afraidfortherepublic
We can spin it in our own views. The chart as others have, show a basic housing and commercial bubble. It's not like the Congress set the interest rates ala the Fed.

I wonder how our economy would have been affected by the 2007 meltdown if mortgage interest wasn't deductible, like in Canada (who basically had zero real-estate bubble). For that matter, I wonder if the collapse in 2007 would have happened...

That's something 100% in the control of Congress - the tax law. Throw the whole thing out, and implement a flat 17% income tax with a single $10,000 standard deduction. Nothing else - no deductions, prepayments, etc. One simple rate - you make $9,000 - no taxes. You make $11,000 - $170 in taxes. You make $100,000 - you pay $15,300 in taxes.

I bet the elimination of all the tax law garbage would have either staved off - or significantly weakened - the bubble that happened.

11 posted on 08/14/2011 5:36:29 PM PDT by FromTheSidelines ("everything that deceives, also enchants" - Plato)
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To: MontaniSemperLiberi

Nicely done! I’ve read about the pieces at different times in the past, but this has visual impact.

An interesting conclusion to be drawn here: If this is what happened to the 2000 projections, what can we expect from Obama’s projections done in 2010 and 2011, which show big deficits, but mild improvement due to growth and the “efficiencies” of Obamacare? Makes me shudder.


12 posted on 08/14/2011 5:50:12 PM PDT by Pearls Before Swine
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To: FromTheSidelines

I’ve done a bit of reading on that topic. Here are some causes.

Freddie and Fannie cannot be overstated.

Money sent to China was used to by mortgage backed securities which was funneled back to making more mortgages.

The whole mortgage trading scheme as described in The Big Short, as a corollary the misuse of the Gaussian copula function.

The tax deduction for interest, as you point out, created an incentive to get high interest mortgages.

Low interest rates.

High credit card limits.

The bursting of the “dot com” bubble. All that money withdrawn had to go somewhere and the Fed decided not to tighten the money supply after 9/11.

An end to ever increasing housing prices.

Low cost, transient (read illegal immigrant) labor.

And more. This financial thing is a whole big mess and neither the Democrats or the Republicans have shown any inclination to clean it up. They all go to Washington wanting to do something great rather than clean up after the last congress.


13 posted on 08/14/2011 5:58:18 PM PDT by MontaniSemperLiberi (Moutaineers are Always Free)
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To: afraidfortherepublic

“use up everybody else’s oil before we use ours.”


That was the policy. I have heard “twenty years” before we drill our reserves for over 10 years, now.


14 posted on 08/14/2011 7:56:44 PM PDT by reformedliberal
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To: FromTheSidelines

The mortgage interest deduction had nothing to do with the housing bubble and lack of one in Canada. As I understand it, Canada actually required you to have cash for a deposit and didn’t make the risky sub-prime mortgages we did. We were giving some loans without even doing income verification. It was total insanity.


15 posted on 08/14/2011 11:40:56 PM PDT by newzjunkey
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To: reformedliberal

Stupid policy — selfish too. That’s one of the reasons we’re in the pickle we are in. Didn’t anybody notice that the housing and mortgage business collapsed after gas hit $4 per gallon? People cannot afford to keep their cars filled at that price. The whole economy slows down.


16 posted on 08/15/2011 6:04:37 AM PDT by afraidfortherepublic
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To: Nailbiter

bfl


17 posted on 08/16/2011 10:42:26 PM PDT by Nailbiter
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To: Nailbiter

Bookmark


18 posted on 08/23/2011 8:20:22 PM PDT by Publius6961 (My world was lovely, until it was taken over by parasites.)
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To: MontaniSemperLiberi

bump for later.


19 posted on 09/04/2011 9:03:38 AM PDT by meyer (We will not sit down and shut up.)
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To: MontaniSemperLiberi

Pretty interesting chart, but at first glance, I note that it seems to defy the Laffer curve by counting tax cuts as a negative. Historically, such cuts have resulted in a net gain in tax revenue spurred on by increased economic activity.


20 posted on 09/04/2011 12:29:39 PM PDT by meyer (We will not sit down and shut up.)
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To: meyer

You’re right, the chart is very pretty chart-eye-candy-wise, yet almost a whole misrepresentation of real economics and balance sheet. Almost, because it is faithful to current DC political handling of accounting and motive for changes to budget and spending. Which is to say in DC they are wholly delusional.


21 posted on 12/07/2011 3:52:46 AM PST by bvw
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