Visualizing The Government's Massive Budget Deficit Forecasting Error

Tyler Durden's picture

That government projections are not worth the price of the paper (especially not in today's dis-disinflationary environment) they are printed on is no secret. As Zero Hedge recently demonstrated the margin of error in the most recent budgetary prediction can only be classified as insane. We wrote: "On February 28, 2001 George Bush said this about his 2002 Budget: “It
will retire nearly $1 trillion in debt over the next four years.”
Instead, US debt, which at that point was $5.7 trillion, rose to $7.7
trillion. $3 trillion rounding error? Also in the same budget, Bush
predicted a $5.6 trillion surplus over the next ten years, which would
wipe out all of America's debt by 2011. The latest debt figure was $14.1
trillion. A $14.1 trillion rounding error, or a nearly five fold
increase in "rounding errors" in a decade
." So that's debt, what about budget surplus and/or deficit projections? It's not any prettier. And courtesy of the NYT we can now see this in an easy to comprehend animation. Following the jump readers can see just how endlessly upward biased projections tend to almost without fail deviate with reality (and unemployment rates as well). The best indication: the 2012 projection to the 2008 budget forecast callsed for a surplus. Now we are expecting a massive deficit. So why do we listen to these monkeys with typewriters again?

Ful animation after the jump:

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Racer's picture

Hey I object most strongly to this post...

you are being very unkind to.....



covert's picture

I massavely predict a bailout of the govt by we the people or bankruptcy. I predict that the printing will stop when the machines break.


Devout Republican's picture

George is a good Christian doing the best he can do.

pointer's picture

funny - I used to have a brainwashed Christian friend say "I'll vote for Bush because he was baptised Christian, so I know he has good morals"

I don't talk to him anymore - he's an idiot.  I'm not anti-religious, but some Christians are more clueless than a retard at the state fair.

knukles's picture

No need to panic.  The ratings agencies will see through the whole charade and fix it.

Cognitive Dissonance's picture

Understatement of the year from the NYT animation last page.

"Reason for error. Budget forecasts require assumptions about both policy and the economy, and both can turn out to be spectacularly wrong. In 2008, for example, the unemployment rate in 2012 was assumed to be 4.8 percent. The most recent assumption is 8.2 percent."

Clearly just a fat finger error......over and over and over again.

Shameful's picture

Why not? Can't frighten the children by giving them numbers that have anything to do with reality. And it's not like anyone is held accountable for these numbers. They just have to keep them roughly in the realm of MSM believability. Which is to say only so believable that the trained actors can get it out without breaking into open laughter at the absurdity.

carbonmutant's picture

Budgets are for  "little people"...

schoolsout's picture

They rounded QE2...down too much and need to crank it up a notch.  Nobody likes "modest" anything around here's too stable.

The Axe's picture

so, will never matter.

trav7777's picture

what's the estimates now, NeObama has us what at full employment in his 2nd term and back to balance?  LOL

RockyRacoon's picture

Good stuff from Bill Bonner:

How the US Government Deals With Debt in the Post-Bubble Era

Reckoning from Waterford, Ireland...

"What went wrong?" we asked the cab driver.

"Well, they give you all kinds of nonsense reasons. But it's pretty simple. People spent a lot more money than they should. Now, they don't have any money left.

"They put up houses all over the place. But there was no one with the money to buy them. And then the developers went broke. And then the banks that lent them money went broke. And then the government went broke. And now we're all broke."

Booms go bust. Wealth disappears. Debt does not. Someone, somewhere, sometime has to pay it. If not the borrower...someone else.

The story of the bubble years was the build up of debt throughout the world.

The story of the post-bubble years has been the feds' efforts to put the debt onto someone other than the people who borrowed it. Bailout the banks...stick the public with trillions in debt...or print up more paper money, disguise debt as inflation and spread it all over the world.

We saw how the bubble story ended. Now we will see the post-bubble story develop and eventually come to an end too. How? The debt will be repaid - by somebody.

Yesterday, stocks went down 168 points on the Dow. Gold rose $21. Is the post-bubble, post-crisis rally out of gas? Maybe... We'll wait to find out.

Meanwhile... We turn to the grand tableau of history. The story of booms, busts, revolutions, wars...all the things that go wrong in man's collective life.

(Private acts of charity, beauty, and courage do not make the history books.)

What will the history books of the future say? How will they describe us...our time...and what went wrong?

We believe they will tell how three groups brought down the US Empire:

1) The feds
2) The banks
3) The neo-cons

The feds destroyed the empire's economy and corrupted its political institutions.

The banks (including the central bank) destroyed the empire's finances, and its money.

And the neo-cons undermined the integrity of its military, with their expensive mock wars.

All of them worked together to twist the system into a grotesque new shape...and populate it with a race of zombies.

And they're still at it...

The feds are spending $4 billion more PER DAY than they take in via tax collection. In addition, they're printing up $3 billion more PER DAY just to help make ends meet.

Where does all that money go?

Well, here's a report from The Wall Street Journal:

The US government has 15 different agencies overseeing food-safety laws, more than 20 separate programs to help the homeless and 80 programs for economic development.

These are a few of the findings in a massive study of overlapping and duplicative programs that cost taxpayers billions of dollars each year, according to the Government Accountability Office.

The GAO examined numerous federal agencies, including the departments of defense, agriculture and housing and urban development, and pointed to instances where different arms of the government should be coordinating or consolidating efforts to save taxpayers' money.

The agency found 82 federal programs to improve teacher quality; 80 to help disadvantaged people with transportation; 47 for job training and employment; and 56 to help people understand finances, according to a draft of the report reviewed by The Wall Street Journal.

Naïve readers will think to themselves:

"How could the government do such stupid things?"

But that just goes to show how little they understand government.

And more thoughts...

Government labors to improve the quality of our lives. That's the line used by both major parties. It's what most people are taught in school. Even as adults, incredibly, they still believe it.

As reported above, in the WSJ, the feds have set up 82 separate programs to improve the quality of teaching in our schools. Guess they're serious about education, right? But you don't really think bureaucrats could improve the quality of teaching, do you? Of course not. What do they know about teaching?

Or agriculture? Or selling stocks? Or banking? Or anything else? What improvements have bureaucrats ever made? Name one! Who invented indoor plumbing? Who invented the repeating rifle or rolled the first cigarette? Who created Facebook?

Bureaucrats do not create wealth. They transfer it. From the people who earned it, to themselves and other zombies. Efficiency has nothing to do with it. The more programs the better. The more inefficient the better. The more zombies...the more voters to back their larceny.

And what about the banks? After nearly bankrupting the system, the bankers are still in business too. They take the feds' money and lend it back to the feds for a cool 3% or 4% difference. Free money. You can't beat that. And 3% of this year's budget deficit alone is $45 billion. Not bad for government work.

The bankers are self-serving enablers, helping the feds bankrupt the empire. And making money for themselves in the process.

And don't forget the neo-cons. They're doing their part to discredit America's military...sully the empire's reputation...and waste its resources. Iraq, Afghanistan...and now they want to invade Libya!

But we don't blame any of them. They're only doing what comes naturally. Destiny requires that every great Empire ruin itself. They're just playing their parts...


Bill Bonner
for The Daily Reckoning

Cognitive Dissonance's picture

The bankers are self-serving enablers, helping the feds bankrupt the empire. And making money for themselves in the process.

I am the first to single out the disgusting greed run rampant on Wall Street. But we all to some degree or another participated in it as well. Or wanted to, tried to, was to late to, whatever.

Since "they" aren't going to "fix" anything, when are we going to stop throwing our temper tantrums and get to work doing what we all know needs to be done? 

RockyRacoon's picture

Bill Bonner deals with one topic at a time.   He has addressed your point in the past and I'm sure he will again.   I'm doing my part, just as each of us will when the time comes.  More and more people are getting the feeling, if not the facts -- yet.   When the data becomes assimilated by the regular folks we'll see some action.

newworldorder's picture

When the data becomes assimilated by the regular folks we'll see some action.

Not trying to put you on the spot here... Can you share any example with us that our fellow citizens "get it and are taking action."

In addition to ZH I try to look in on 3 blogs with a large following, - Drudge, Huffington Post and Market Watch on a daily basis.

Cluelessness abounds there, much less the concept of thinking brains that can look at cause and effect and try to understand by connecting the dots, in order to try and fix our common problems.

JW n FL's picture


cause its going to be a party and a club that you will be invited too.

RockyRacoon's picture

I think you should look more to the "feeling" aspect of the issue.  Most folks won't burden themselves with actual facts until the feeling becomes overwhelming, then they will seek it out.   I looked into a refi on my house when rates were a hair above 4%.  The mortgage  banker was one of the most ill-informed fellas I'd ever met for his field.   I sent him some email newsletters and shared a few issues of The Privateer with him.   I'm not sure how it worked out but I can guarantee you that, at this point, he can't unknow what he now knows.   I've seen a few folks irritable for "some reason" that they can't put their finger on.   It's that that will drive the average couch potato to pay attention.

A Texan's picture

We believe they will tell how three groups brought down the US Empire:

1) The feds
2) The banks
3) The neo-cons

The feds destroyed the empire's economy and corrupted its political institutions.

The banks (including the central bank) destroyed the empire's finances, and its money.

And the neo-cons undermined the integrity of its military, with their expensive mock wars.


Bonner forgot to add a fourth group, the liberals, self-annointed as the most compassionate and wise people on Earth.  Why?  Because they long ago decided that they were more compassionate than "selfish" capitalists and smarter than the average person by at least 20 IQ points, so they were the only ones who could see the world's problems AND solve them...on the backs of the present and future taxpayers, by social engineering paid for with regulation heaped upon law (no matter that those laws and regulations had no basis in fact) and massive transfer payments that far exceeded the ability of present taxpayers to pay.  So the government borrowed and borrowed and borrowed - but just ask these self-styled philosopher-kings who give themselves the right to spend the fruit of others' labor (past, present and future), it doesn't matter because (now get this), "according to Keynes, deficits don't matter, the government will just create more money." 

Assholes.  They have already assured that the present generation of employed people will not have the relative prosperity and economic security of their parents, and that their kids will live a relatively impoverished life.  Fuck them.  Fuck them all.


Oh, and compared to this permanent gash in the public treasury's throat, a few years of half-hearted military action halfway around the world is not much more than a mosquito bite.


Bonner missed that, and missed this whole group of syphlitic parasites.



Dr. Porkchop's picture

Don't be blinded by trivial differences between party affiliations. The liberals fall under the category of the Feds, along with every other member of the political class. They are all responsible for the mess.

downrodeo's picture

Exactly. They're all statists.

The opposite of democrat is not republican; However, the opposite of both democrat and republican is the anarchist.

Zero Govt's picture

Sack Them!

Sack the politicians and civil servants on the spot that make these 'errors'. Sack them for total budgetary incompetence. Sack them for undermining the language. Sack them for being shit.

If we sack everyone in Govt that cannot do their job competently there'd soon be a clear out. Instead they all just shoulder shrug. Not good enough fukwit, You're Sacked

zaknick's picture

Government lies, bitchez!

by zaknick
on Thu, 03/03/2011 - 13:17

Cant wait!

Depression recession total bust for this monster called Amerika.

I want to see you motherfuckers and your families eat some serious shit... I mean wallow in disaster land for decades... should teach you some humility if not decency! You cant take the uncouth redneck out of the... etc


die America DIE

fall into chaos. Lets see you be the one being raped... oh wait, nothing left to rape; the banksters ate your lunch you stupid, stupid narcissistic slaves


I will see you crash like the malign tumor on humanity that you are.

reply flag as junk (2) 

by woolybear1
on Thu, 03/03/2011 - 13:22

speaking of clowns...

reply flag as junk (0) 

by zaknick
on Thu, 03/03/2011 - 13:42

Thanks! You & that stupid fuck topocallingtroll just made me smile with joy!

Bozo the clown says CRASH BABY CRASH

and guess what? What the banksters have done to this economy has been ongoing for forty years (see John Williams 1973 income levels comment earlier). There IS NO WAY TO REVERSE THE DAMAGE QUICKLY nor is it politically feasible without revolution.

You get the gov you deserve, BITCHES!

Have a foul day!

reply flag as junk (2) 

by woolybear1
on Thu, 03/03/2011 - 13:55

oh my we have a slight anger management problem, we may crash but, you will come along for an even nastier ride

reply flag as junk (0) 

by topcallingtroll
on Thu, 03/03/2011 - 13:28

Having a bad day loser?

Are u just euro trash or do you have a real grievance?

Cmon...tell us how you really feel.

reply flag as junk (0) 

by JohnG
on Thu, 03/03/2011 - 13:46

Go suck shit through a tube asshole.

Really witty this last one.


RockyRacoon's picture

Some folks just have nothing better to do than keep track of comments.

It all goes back to that "get a life" suggestion that is so pertinent in this instance.

blobbus's picture

9/11 was GWB and the GOP's excuse to spend like drunken national guardsme... er.. sailors. After that event, "fiscal conservancy" went out the window all because we had to win the "war on terror" (which will be won where? when? how?) 

That is why I will never trust the GOP again (Boehner can cry all he wants). Now I dont trust the Dems either.

Ron Paul? Maybe. I consider him more a Libertarian in a crowd of Republicans.

Oh regional Indian's picture

I like the fait accompli aspect to knowing that these are cycles that cannot be turned. They have to be played out. So, NUMBers and Stasis-tics being what they are, the truth is that all good indicators are headed down a cliff while all the bad ones are ripping up off the charts.
it all looks like Al Gorer redux to me. Red lines plunging or rocketing everywhere.

Don't just sit back and enjoy the show though. The other side of this is going to be mean by today's standards.

Open your eyes, as straykitty said so eloquently.


JohnG's picture

Oh nooooooeeeeesss!

Another government screw up?  It seems purposesful.

I mean, one might think that they could get something right just randomly once in a while.

Alas, no.  All we get is promises, happy happy joy joy.  While everything in sight crumbles. 

trav7777's picture

in the government's defense, they are so packed with diversity hires and diversity promotions to positions of authority, that they are far too incompetent to actually accomplish any such grand, purposeful plan

JohnG's picture

It's the Peter Principle...helped out.

Everything in this book is true, and is a must read.


topcallingtroll's picture

I have to agree that obama's rosy projections for revenue improvements are unlikely. This is going to hurt a bit, but I doubt we will be any worse off than the average developed nation.

We will make it thru this. Naysayers and foreign trolls notwithstanding.

Vampyroteuthis infernalis's picture

We will make it through this unemployed and homeless.

MyKillK's picture

I still don't understand why a surplus is shown around 1998. According to the Treasury's own data the balance of federal debt held by federal entities on 9/30/1997 was $1.58 Trillion and on 9/30/1998 it was $1.75 Trillion and in 1999 it was $1.97 Trillion. So where does this mythical clinton surplus come from?

JohnG's picture

Government economists are all unicorns.  Really, they even have PHD's.

They can't add.

fbrothers's picture

"Prosperity is just around the corner." "There is nothing to fear, but......"

NOTW777's picture

this can be explained by bagdad bob steve liesman

Robert Neville's picture

Tell me again how we can run a surplus in the 90's but gross debt still increased every year. The chart is bogus just like all statistics derived from government stats. The fact that it was published in the NYT makes it even more bogus. Writers there are still trying for an injection of the stuff that was on Monica's dress.

chubbar's picture

We never had a surplus in the 90's. Because Social Security revenues go into the general accounting budget it shows up as a surplus for one year, I believe 98 or 99, that the deficit was covered by this sleight of hand. The money for SS was spent on general budget items and a worthless slip of paper was stuck into a file cabinet. To redeem it the treasury will have to sell more debt instruments to someone, probably the FED. The fraud marches on.

AldoHux_IV's picture

The growing debt is a measure of how much the fed has enslaved our country and via proxy the rest of the world to meaningless paper debt.

End the fed while reforming the treasury and you end the amount of debt that looms over us.  End the corporate sponsored treason of our nation and you end the bullshit spending mismatch with revenues problems.  End the imbalances and you end the new normal and bring about a true economic recovery.

luk427's picture

To error is human. To really fuck things up requires the government.

Rodent Freikorps's picture

CBO is forced to take the Congress' word for what they will do, even when they know it is a bald faced lie.

I almost pity them.

Misean's picture

"That government projections are not worth the price of the paper"

They'll just start printing them on 100BB notes soon enough...cheaper that way really.

tmosley's picture

The economists who work for the Federal government simply don't understand economics.  That much is clear from the charts.

If they did, they would be at least somewhat accurate.

Keynes was wrong.  Economists need to get over it before they consign us all to a new dark age.

Shameful's picture

Not necessarily, odds are that many are just lying. Come on what kind of panic would it cause if gov economists came out and told the truth? "The US is insolvent. Only an lunatic or fraud would buy long bonds with an intention to hold. Buying dollar based securities is a breach of fiduciary duty", yeah that would go over well. Can't spin the cotton candy of fraud without deceit and fraud is the only engine keeping this economy on track, such as it is.

Dr. Porkchop's picture

It's the same kind of unspoken self censorship that no member of the mainstream media would ever admit to pubicly.

tmosley's picture

Whether they are liars or incompetent doesn't matter.  The results of their actions are the same, as are the remedies.