Skip to comments.Those Colossal, Recklessly Irresponsible $2 Trillion Errors
Posted on 08/08/2011 5:31:50 PM PDT by Qbert
Its laugh-out-loud funny to hear the Obama administrations all out assault on S&Ps math skills. According to the administration, if the downgrade in Americas credit rating is not the fault of the Tea Party (apparently for demanding the very spending cuts the political classs refusal to make prompted the downgrade), it must be due to what the administration calls S&Ps colossal $2 trillion error indicative, Treasurys Turbo Tim Geithner told NBC News, of the rating agencys stunning lack of knowledge about basic U.S. fiscal budget math. It couldnt possibly be President Obamas outer-worldly spending spree, right? It couldnt possibly be that we are at the point of borrowing because we cant otherwise make the interest payments on our prior borrowing.
This jogged my memory. So I searched through NROs collection of Obama administration Friday Night Bad News Dumps until I found this little ditty, from nearly two years ago. On a sleepy late August Friday in 2009, after the president and his family had already skipped town for their Marthas Vineyard vacation, the administration quietly announced that it had made a wee mistake in calculating deficit projections over the next ten years. Consequently, the White House Office of Management and Budget was revising its debt totals from about $7 trillion to about $9 trillion wouldnt you know it: a $2 trillion error that some of us thought was downright colossal.
The White House confession of error in 2009 brought President Obama into line with the Congressional Budget Office, which had been projecting a $9.1 trillion deficit over that same timeframe. Interestingly, it is S&Ps departure from the CBOs projections that now causes the Obama administration to frame S&P as numbskulls.
Yet, as S&P has explained, unlike the administration and the CBO, it focuses on a three-to-five year window. S&P finds that this timeframe, which is more in the control of the current Congress and president, is a more reliable predictor of financial health than illusory ten-year forecasts. In the tighter window, the difference between S&P and the CBO was not that great a difference of $345 billion, not $2 trillion, and one which, accepting the CBOs projection, would still leave the U.S. at a dangerously high debt-to-GDP ratio. (As the Wall Street Journals editorial notes this morning, debt-to-GDP has shot up over 40 percent since Obama took office.) Basically, S&P is saying the debt ceiling deal with its backloaded cuts that are unlikely ever to happen is, on any accounting, unserious. We opponents of the deal have been saying that all along. It was thus interesting to find the Journals editors supporters of the deal sounding very much like hobbits this morning:
The Obama Administrations attempt to discredit S&P only makes the U.S. look worselike the Europeans who also want to blame the raters for noticing the obvious. Treasury officials and chief White House economic adviser Gene Sperling denounced S&P for relying on a Congressional Budget Office scenario that overestimated the U.S. discretionary spending baseline by $300 billion through 2015 and $2 trillion through 2021. But even adjusting for that $2 trillion would only reduce U.S. publicly held debt to 85% or so of GDPstill dangerously high. And that assumes that recently agreed upon spending caps are sustained over a decade, something which rarely happens. [My italics.]
In any event, since so much is being made by the administration of CBOs prowess at basic U.S. fiscal budget math in arriving at ten-year forecasts, thanks are in order to Zero Hedge, which dug out CBOs 2001 forecast of where wed be today. According to CBO, we were going to be sitting pretty: The debt would essentially be paid off (except for holders of bonds that hadnt matured yet), the debt-to-GDP ratio would be a tiny 4.8%, Treasury would be in the black holding $2.4 trillion more in uncommitted funds than it owed in debt obligations, and Leviathan would be collecting 2011 budget surplus of $889 billion!
I guess they were a tad off. But not to worry, Im sure theyve got 2021 pegged to the penny.
Liberals claiming math literacy?
how many states ? how old are his kids ?
Rick Santelli Goes Off: Wed Be BBB Without Tea Party! (Video)
Gateway Pundit ^ | August 8,2011 | Jim Hoft
Posted on Monday, August 08, 2011 5:03:44 PM by Hojczyk
From the Video: Rick Santelli reacts to President Obamas blame game when it comes to the downgrade of the United States of Americas credit rating. Santelli says that if it wasnt for the tea party movement, Americas credit would have been downgraded to BBB.
He also responds to the argument that we have a revenue problem by comparing it to if his wife spending 30% more money then telling him to get 2 more jobs. Hat Tip Ed
Barack Obama has broken many barriers and accomplished many "firsts".
This is only one of them.
Turbo Tim Geithner. I am soooo stealing that.
But I thought the downgrade had to be racist, since they never downgraded during a white president’s tenure.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.