This page has been archived and commenting is disabled.
CBO Crows
The CBO published a new report (pdf) that gives itself a pat on
the back. The analysis looks at the success rate of CBO economist's
forecasting of key economic metrics over a long period of time. If you
can wade through this beast you will see that the CBO thinks pretty
highly of itself. One example:
I am going to take issue with the CBO. My first concern is that their
measurement stick is a comparison of their forecasts to those of the
“Blue Chip” economists. Who cares? Yes they came up with numbers that
were highly correlated to others. That proves nothing.The others were
off the mark.
My second concern is that the study covered a period up to 2008. That
cut off date is convenient. They missed the forecast by a mile in that
year and ever since.
Here is a slide of the January 24, 2007 CBO forecast for the budget
deficits.
Note that their expectation for the 2008-2011 cumulative deficit was
$1.25T. The real number will be $4 Trillion. About a 300% error rate.
I’m razzing on the CBO because they gave me the window with their
glowing report. I wonder what it cost to produce. Econometric
forecasting is tough stuff. The future is much more unpredictable than
what we were used to. It’s not just the VIX, everything is moving
faster, including global economic cycles.
In the first slide there is a third column: Administration projections. I
think this is a dig at the OMB. Basically they are saying, “We did
about the same as the blue chips, but we did better than OMB”. That
result makes sense. OMB is the Executive branch and therefore political.
Politics always comes in the way of forecasting. This slide is from
2008. It is OMB’s projected deficits. They had us going into surplus.
They were off by a tidy $5T.
One lesson might be that the future is not predictable and therefore a
range of forecasts must be developed. One of them must be the proverbial
“Worst Case”. The view of the dark side is of course produced by the
CBO. They just don’t release that set of numbers. They should.
Another lesson would be to get this process apolitical. That of course
is impossible.
»
- advertisements -
virgilcaine avatar one of the best evah . . .
Just like 08 only Sovereigns are the main course. Eastern Europe for an appetizer.
Wild Ride?
(Reuters) - The IMF and EU suspended on Saturday a review of Hungary's funding program, set up in 2008 to save the country from financial meltdown, saying it must take tough action to meet targets for cutting its budget deficit.
http://www.reuters.com/article/idUSTRE66G0RT20100717
Wait until Monday....
Its Going to be a wild ride .. Gov is a runaway train and were the caboose.
At least it wasn't cut and pasted accidently from another part of the spreadsheet.
Thanks, Bruce. My record looks pretty damn good as well if I cut off the period up to 1993. Then picking back up at 2009 I look really good! The only folks who read this are the media beating the recovery drum. Look for some juicy excerpts next week on CNBC, as some sort of "proof" or another.
I know this is GAO rather than CBO, but they are birds of a feather. Just to extend the topic a bit on a summer Saturday:
WASHINGTON (February 26, 2010) – The U.S. Government Accountability Office (GAO) could not render an opinion on the consolidated financial statements of the federal government (other than the Statement of Social Insurance) because of widespread material internal control weaknesses and other limitations.
“While financial management has improved significantly since the government began preparing consolidated financial statements, for the 13th year in a row now shortcomings in three areas again prevented us from expressing an opinion,” said Gene L. Dodaro, Acting Comptroller General of the United States. “I’m referring to serious financial management problems at the Department of Defense (DOD), the federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between agencies, and the ineffective process the federal government uses to prepare the consolidated financial statements.”
http://www.gao.gov/press/financial_report_2010feb26.html
GIGO all over the town . . .
Isn't it amazing (I guess not) that the government can't close its own books and it gets NO media attention? Our government has no idea where the money's going, and there's no outcry?
Oh, wait - everyone cares more about attenna-gate.
Bruce, love your photos (even more than Robo's--if this be heresy and upon me proved...). They're keepers. And along with that I get to read interesting commentary.
Sometimes they are the hardest part. Others, the pic is the germ for a story. How great is the internet?
Hard to believe that Elmendorf has an ego
http://cboblog.cbo.gov/
Women in summer would like to become beautiful. Everything can grab other's eyes is their best friends.Products make them beauty and confident is their favourite. Look in the street,you can see many different types of make up to show women's personality.
Welcome to the shop, the following is our products, free shipping.
Soccer Shoes Cheap Soccer Shoes Nike Soccer Shoes Adidas Soccer Shoes Nike Soccer Shoes sale Adidas Soccer Shoes sale UGG UGGs UGG Boot UGG Boots UGG Boots Sale Cheap UGG Boots UGG Boots Cheap Women UGG boots ugg boots cardy ugg cardy boots Nike Air Nike Air Max Nike Air Max Shoes Nike SB Nike Dunk Nike Dunk SB Nike Dunk SB Shoes Nike Shox Nike Shox Shoes Timberland Timberland sale Timberland boots Timberland boots online Timberland on sale New timberland boots Women Bags Women Bags Sale Women Handbags Women Handbags Sale Women New Bags Cheap Bags Cheap Bags On Sale UGG UGG boots UGG boots sale UGG boots short Short ugg Short ugg boots Ugg boots tall New women bags New women bags sale New women bags sale online Louis Vuitton Handbags Gucci bags Nike Nike Shoes Nike Shoes Sale Nike running Nike running shoes Nike trainers Nike trainers shoes Timberland Timberland boots Timberland boots sale Timberland boot Timberland boot sale Timberland boots cheap Men timberlands MBT MBT Shoes MBT Chapa GTX MBT Men Shoes MBT Women Shoes Discount MBT Shoes LV Handbags Gucci Handbags Chanel Handbags Chloe Handbags D&G Handbags Dior Handbags Fendi Handbags Hermes Handbags Jimmy Choo Bags Marc Jacobs Bags Miu Miu Handbags Mulberry Bags Prada Handbags Versace Handbags Yves Saint Laurent Balenciaga Bags Burberry Handbags LV Handbags Gucci Handbags Chanel Handbags Chloe Handbags D&G Handbags Dior Handbags Fendi Handbags Hermes Handbags Jimmy Choo Bags Marc Jacobs Bags Miu Miu Handbags Mulberry Bags Prada Handbags Versace Handbags Yves Saint Laurent Balenciaga Bags Burberry Handbags
Those who want to become most beautiful in the world should try them. Just ones can make you different. Girls who want to grab your boyfriends's heart is necessary to use them.