The CRFB Sees Locusts, Plagues And Lots And Lots Of Budget "Impossibilities" In America's Future

Tyler Durden's picture

The Committee For A Responsible Federal Budget Project has released its most recent BudgetWatch report, "The Cost of 'Current Policy'", which while required reading for all mathematically inept professionals in the administration (all of them), will likely get zero attention, due to conclusions such as this one:

This situation is economically impossible; at some point, U.S. debt would reach a level so high that creditors would stop lending us money. The question, though, is how the situation will be resolved. Will politicians confront the policy choices or delay them to the point where they will be forced upon us due to a fiscal crisis? The longer we wait to take on these issues, the worse they will get and the more painful it will be to change course.

Everyone hates those who tell the unsugarcoated truth (especially CNBC, whose guest policy has shifted to only inviting "analysts" who agree with Larry Kudlow that double digit unemployment is the greatest thing to happen to America). Alas, it is these very people who are usually correct, however their perspective is completely useless in retrospect.

So here are the CRFB's loathsome observations:

US Budget Watch has constructed its own “current policy” baseline by assuming select policies do not conform to current law (see for details).2 Over the next decade, keeping certain policies in place would result in roughly $3 trillion less in revenues than is scheduled under law and close to $2.5 trillion more in spending, including interest. Complying with current policies without offsetting the costs would result in drastically larger deficits between 2010 and 2019 and would cause the ten-year deficit total to grow from an already dangerously high $7.1 trillion to $12.6 trillion. Debt held by the public would rise to over 90 percent of GDP by 2019, as opposed to 68 percent without those changes.


And this:

With public debt accumulating on a compounding basis, extending current policies would create an even more dire long-run picture. CBO’s Alternative Fiscal Scenario, which generally assumes current policy (although it has not been updated to reflect CBO’s latest economic and technical assumptions), projects deficits will rise to 10 percent of GDP by 2027 (rather than 3.6 percent under current law), exceed 20 percent by 2045 (as opposed to 7 percent), and reach 42 percent by 2080 (rather than 18 percent).


You read that right folks: in 3 generations, deficits will reach an unfathomable 50% of GDP! Obama's legacy is to effectively enslave America to its creditor interests.

As for that $9 trillion 2019 deficit? Why, even that is low:

Primarily due to the cost of renewing most of the 2001/2003 tax cuts, indexing the AMT, and allowing physician payments to grow, the president’s own budget projects a 10-year deficit of more than $9.1 trillion. CBO would likely have estimated deficits closer to $10 trillion under the president’s budget.

And probably the most amusing observation is the CRBF's observation of discretionary spending:

Though not technically “current law,” the CBO baseline makes assumptions regarding the growth of discretionary spending that are probably unrealistically low. As a matter of convention, CBO assumes that discretionary spending (including supplemental spending for overseas operations) will grow roughly with inflation. In reality, the discretionary spending level is set annually by Congress, and absent any caps it can grow at any rate. Historically, the growth rate has been much higher than inflation— often closer to the pace of GDP growth.

At the same time, the cost of continuing the current policy of annually increasing discretionary spending is quite high. If regular discretionary spending is allowed to grow with GDP as opposed to inflation, it would add $1.7 trillion to the deficit over the next ten years (excluding interest). Even after assuming a gradual phase-down in spending for the war in Iraq, discretionary spending would still be $1 trillion higher than in CBO’s baseline.

And that's where you get an extra $1 trillion in additional budget deficits.

And the CRFB's unpalatable conclusions which will definitely be ignored by SPARC clusters, who, like the rating agencies, are only capable of chasing upward momentum:

The mounting debt under such a scenario would likely crowd out private investment to a significant degree, resulting in stunted economic growth. At the same time, it would ensure that government interest payments would consume a large and rising share of the budget, leaving little room for anything else. And, at some point, our rising debt would make continued borrowing prohibitive, as our lenders and investors cease their large-scale purchasing of U.S. Treasury bonds. If it came to this, the result would likely be a serious fiscal and economic crisis, followed by steep and perhaps crippling tax increases and spending cuts.

In essence, the very future of the American system is at stake. And somehow nobody in the administration is willing to do anything to prevent what will be a certain cataclysm absent some miraculous diametric shift in policy. Which of course will never come, as Obama has to be very worried about his sliding popularity and upcoming mid-term elections, while the oligarchy of Wall Street knows too well it has at best 2 years to collect on bonuses, and option incentives for massively mispriced underlying stocks, before everything eventually comes crashing down. And when it does, everyone will take off in their Textron made jets (which will by then likely be a Goldman LBOed company, purchased once the Conviction Buy becomes a Conviction Sell, and Goldman stealthily purchases all the stock), to live happily ever after on some quiet Pacific Island, far from the pitchfork armed crowd of what was formerly the American middle class (as all boats will have been purchased by Optiver's market manipulating liquidity providing multi-quadrillionaires).


h/t Richard

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Anonymous's picture

So, Tyler, let's hope you are taking your words to heart and have some preparedness in place. I wouldn't want to be stuck on Manhattan when the day of financial reckoning comes.

Anonymous's picture

There is absolutely no question how this will play out. Why do we even ask questions like "Will the powers that be do the right/necessary thing?"

Of course they won't. The question is preposterous. Our system of government prevents taking unprofitable choices with painful outcomes. We can only do what is immediately beneficial, and so the "hard choices" never get made.

We are headed at 1000mph towards collapse, and only an idiot or an ignoramus cannot see it.

Prepare accordingly. This *is* happening. And it *is* happening in your lifespan. The immediate result will be anarchy, and then a new America which will be worse than anarchy.

Be prepared for anything.

Be prepared to fight, hunker down, bribe, flee or suffer. I'm not sure there will be any other options. Fleeing might make the most sense for the most people.

ghostfaceinvestah's picture

"Obama's legacy is to effectively enslave America to its creditor interests."

Not if we don't pay it back.

Anonymous's picture

What makes the green grass grow?

Blood Blood Blood makes the green Grass grow!!!

Anonymous's picture

What exactly is all this money being spent on?

Anonymous's picture

Good question that I've asked myself a lot recently.

Certainly not being spent on, oh, Cash for Clunkers payments. Or for all those portions of the stimulus that haven't even been spent yet.

I know what SOME of it has been spent on, though, since I happen to be not too long out of grad school...

All sorts of stuff in there that, on the surface, might seem to be good news for students. Except for the part where the gov't "buys" (seizes) your loans from your lender, forces you to service your loan through the Dept. of Education regardless of your loan terms, and changes all the rules of eligibility for deferments and forbearances.

Ask around and see how many recent grads are getting the lovely little letters in the mail informing them that the Dept. of Ed. now owns their asses... For the children, of course. Hell, the gov't could easily pour out several tens of billions of USD a year buying these up based on the number of degrees awarded each year and the average student debt.

Oh, and just for shits and giggles, let's throw in a "rule change" last month to retroactively take away deferments on loans the Dept. of Ed. hasn't managed to seize yet. Yeah, now we're cookin with gas.

tewkatz's picture

I think we are using past experience to predict what is happening, which may be flawed.

At no time in history has money been 'digital'.  I really don't think our leadership is worrying about actually spending anything...after all, they can, in the span of a few minutes, 'print' the entire money supply 100X over if they wanted to...every day...with no-one to stop them.

Now, the game is all about individual jockeying in the global-power-structure (singular) and playing the game of controlling/calming Joe and Jane six-pack back home.

Just my $.02 (and depending on inflation, that may be valued as a 'free opinion') :)


economicmorphine's picture

You're still enslaved Actually, you're still enslaved even if you don't pay it back since you will need to continue borrowing.  The only way you're not enslaved is if you don't pay it back and somehow develop the fiscal discipline to live within your means.  That isn't going to happen until it is forced upon us, thus slavery.

chumbawamba's picture

Anything tied to a Social Security Number is not yours.  It belongs to someone else, with your ignorantly tacit approval.  If you want to be free, trade your syphillitic Federal Reserve Notes for fine gold and silver.  Gold and silver have no counter-party.  They are discrete and discreet stores of value.  Hide it well, and no one can take it from you.

I am Chumbawamba.

Cindy_Dies_In_The_End's picture

This won't happen. We're starting a new program called Cash for Old People. Bring in your grandma for a few bucks and the country will sell soylent green to the governments of the Third World. They get food and our health care costs dramatically decrease so everyone gets paid back and everyone is happy.


Problem solved. ;)

Argos's picture

I love your idea.  Better than mine.  I was going to suggest we declare war on Canada, and catapult all the old people.

Stink_Pickle's picture

I agree, though when we do, "My visions of locust return, I see Pinkertons [Chinese] coming in swarms."

Gubbmint Cheese's picture

okay perhaps its my twisted, end of the week sense of humor that's been ruined by yet another spy ramp job - but there's a huge amount of irony that the first african american president in U.S. history is 'enslaving america to its creditor interests'...

come on.. the rest of you were thinking it.. I just said it out loud.

no? too soon?



Marshal Ney's picture

Too much cheese can really constipate a fella.

Gubbmint Cheese's picture

perhaps I'm just watching far too much Family Guy..


Bob's picture

Twisted irony it is (though not something we'd see from a "black" man who wasn't raised by his white grandparents, IMO.)  It is the shameless pandering of the classic "oreo."  FWIW.  No wonder educated white people like him so well . . . he's so very civilized

Bob's picture

Twisted irony it is (though not something we'd see from a "black" man who wasn't raised by his white grandparents, IMO.)  It is the shameless pandering of the classic "oreo."  FWIW.  No wonder educated white people like him so well . . . he's so very civilized

ZerOhead's picture

"Chains you can believe in?"

Anonymous's picture

Ah ah ah aha ha aha aha aha aha aha aha ah (lol)!

John Self's picture

I loved this bad pun almost as much as Bill the Cat.

SWRichmond's picture

Actually, I couldn't help but notice that Obama will be the second legislator from Illinois whose election to the presidency will cause the political breakup of the U.S.; this time, though, while the army is overseas.

Foreigners: hide and watch.

bbbilly1326's picture

what total bunk.

That president from Illinois did not cause the breakup of the US.

It was Southern bigots and slaveowners who didn't want to give up their despicable lifestyle and actually work in their own fields, who caused it.

Give us a break.........

Anonymous's picture

lincoln could have bought all the slaves and made slavery illegal, like every other civilized nation at the time.

he chose war.

Rusty_Shackleford's picture

Thank you.  Someone out there is reading their DiLorenzo.  Sad to say, but the only thing most Americans know about history is what they learned in their 8th grade "Social Studies" textbook.


Hephasteus's picture

The war had nothing to do with slavery. That's revisionist history. Lincoln SAID he would fight the war if it didn't free one slave. He fought the war because the central bankers were screwing up the southern economy by manipulating the prices on all the commodities. Mostly cotton.

economicmorphine's picture

Bbbilly, I grew up believing what you did.  Then, when I got older I discovered I had been lied to by my government.  It always bugged me.  I mean, on one hand we were practicing genocide against native Americans whose only "crime" was living on land we wanted to steal and on the other hand we wanted to free slaves because it was the right thing to do?

Maybe in your world, but not in mine.  The truth is that Lincoln used slavery as an excuse to destroy the South economically.  In spite of 200 years of history that suggests we tend to act in our own self interest as a nation, it's nice to know that there are still those, like you, who will eat whatever is spoonfed you with a sort of childlike innocence.



Rusty Shorts's picture

economicmorphine - you hit the nail on the head brother.

bbbilly1326's picture

more total right wing nut bunk.........

Anonymous's picture

You mean like the slave owners in the North Lincoln had no problem with while in office?

They steal from us everyday's picture

Obama doesn't represent typical african american interests, he is a straight scumbag asshole socialist know it all communtity crapivist. early?

Anonymous's picture

you do a disservice to scumbag asshole
socialists by calling obama that...bucket of
shit comes to mind when i think of
kenyan born indonesian barry soetoro mubrak
hussein obama or whatever the fuck his name

Anonymous's picture

All the election of Obama did was get us rid of the appallingly ignorant, dubya.

The POTUS being the figurehead that he is, a PR person for the US, and subsequent to 9/11, the election of any person with a name like Obama Hussein is a testament to the dereliction, perversion, blatantly corrupt scoundrels the republican party morphed into for 12 years. Having voted for them until the first W election as a life long republican, I am mortified that I participated in this

Thru the law of Sequential Causation, Bush's election, after the legal, semantic, moral and ethical pit of the Clinton admenstruation, appears to make our elections ever more simply reactionary with little real regard to the merits or track record of the new pretenders.

Marshal Ney's picture

Retard alert: (59481)

bbbilly1326's picture

I would looove to hear how you might describe "typical African American interests" mean like fried chicken and watermelon ?


That's pretty much the level of thinking when you start to assign a whole group of people certain "characteristics".


Oh, and maybe you could describe some of those "typical Causcasian American interests".....that could be fun too.

How about "typical Asian American interests"......

Can you really not see the ingrained bigotry you're carrying around ?

Anonymous's picture

caucasian American, Asian American, Hispanic American....and you probably have no idea how much of the problem you are with that racial stuff. It is always the fools crying "racist" who want to put everybody in a racial category. How about if we just let them be Americans ?

tugtrash's picture

actually the new PC terms are: af-am, eur-am, as-am, and so forth. It makes us more homogeneous, don't you think. Who the frik cares what someones space/time suit looks like. Scoundrels have been known to wear all manner of them.

Cindy_Dies_In_The_End's picture

Too soon? Not soon enough for Demi and Ashton. They want to enlist us peasants to pleadge servitude to the President. Thank God they told me what I must do.

Ned Zeppelin's picture

I have actually pondered his status as "First Custodian".

Chief Hatuey's picture


"but there's a huge amount of irony that the first african american president in U.S. history is 'enslaving america to its creditor interests'..."

Actually the irony is that it was pointed out by someone going by the name  "Gubbmint Cheese".

My observation is that whether it is people like us on ZH or the talking heads of tv, radio or even the internet... until we stop referring to our national problems as if Obama is actually pulling the strings we will continue to go around in circles. It is like watching the WWF, we get caught up in the show and spectacle. Vince McMahn is pulling the strings and everything is done with his best intest in mind. Same with our country. Corporations are directing the show to their benefit. They write the policies, they write the bills, they tell our representatives what to say, they tell the media what to report.

What can we do to make a stand by our daily actions?

Put your money into local credit unions today! Buy at local stores or farmers markets Do whatever you can to support your local community especially get involved with your local goverment. Donate your time or money, become a member of a group, joining a committee ect.

After reading this story on the CRFB report and taking in other info conerning everything from violations of the Posse Comitatus Act, abuse of presidential executive orders, Comprehensive Annual Financial Reports the chemical compounds of the swine flu vaccine, Flash trading, threats to the Hippocratic Oath and the financial gestapo known as GS and JPM we have got to get up from our laptops and pcs and take action.

Just think this all started because i could not find "Gubbmint Cheese" at neither of these sites: or

Cheddar Bob's picture

to reiterate:

"Put your money into local credit unions today! Buy at local stores or farmers markets Do whatever you can to support your local community especially get involved with your local goverment. Donate your time or money, become a member of a group, joining a committee ect."

chumbawamba's picture

Well, do we know who is pulling Vince McMahon's strings?  The rabbit hole goes deeper!

I am Chumbawamba.

Chief Hatuey's picture

Good lord! Is he a former Goldman Sachs pinhead also?

By the way your tagline has inspired me.

"What I justice"

Clive Owen "The International"

rD2.0's picture

Obama listens to Geither and Summers who are both idiots. Where the hell is Paul Volcker

Bob's picture

Where the hell is his street sense?  

chumbawamba's picture

He's a nigger, not a nigga.

I am Chumbawamba.

MinnesotaNice's picture

You know what Chumbawamba... I think I might have to ask Heli-Ben on his next fly-over of South Central LA to drop you off in the northwest corner neighborhood near the 110 and 105 interchange wearing a blue bandanna... with that comment pinned proudly to your chest... and I would suggest immediately upon your arrival you begin discussing all of these types of thoughts with as many people as you can find... you are one of the most offensive people on this site... imho... you really ought to do a little historical reading and develop a more refined sense of empathy...

Anonymous's picture

Paul Volcker is warning that money market funds are the mechanism that triggers systemic crises - the tool by which the Street extracts huge, unaudited rents from the Fed and Treasury to "prevent collapse". Expect we're being set up for Round 2 in the near future.

Volcker Says Money Market Funds Weaken US Financial System

Cindy_Dies_In_The_End's picture

Volker can't fix this one. Way too late.

Ned Zeppelin's picture

Volcker was brought in house to defuse his effectiveness as a dissenting voice outside.  Keep your friends close . . .

Chumly's picture

Then Paul Volcker needs to do one courageous and heroic act as the sun sets on his stellar career - completely disengage from this disaster Socialist-Communist "Presidency" and speak up loud and clear about the looming next leg down in this depressionary crisis.